How tight does the labor market have to get before wages really start heating up?
In Lincoln, Neb., average hourly earnings were stagnant until the unemployment rate crossed below 2.5% in the fall of 2014. Then, wages took off. Since last October, they gained as much as 10.9% from a year earlier. The jobless rate in October: 2.3%.
No one is suggesting the national unemployment rate has to get down to 2.5% before wages show signs of life. But there are some questions on what full employment looks like. While the unemployment rate is back to 2008 levels, other metrics look weak.
Chosen excerpts by Job Market Monitor. Read the whole story at Where the Jobless Rate Is 2.3%, Here’s What Happened to Wages – Real Time Economics – WSJ