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Morgan Stanley: “Wage Growth Is Leveling Off, May Be Slowing”

Saturday, April 8, 2017 19:09
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(Before It's News) / by Tyler Durden / Apr 8, 2017 11:10 AM

While Friday’s headline payrolls print – the lowest since May – was disappointing even to the biggest economic optimists, many found refuge in the sharp drop in the unemployment rate, which ticked lower to 4.5%, the lowest print in a decade. And yet there was a problem: with the unemployment rate tumbling, at least in theory indicating even less slack in the labor market, wage growth barely hit consensus estimates. Instead, if indeed the growth narrative is accurate, and if more people were employed, wages should be rising. However, it was this weakest link of the entire reflation/recovery narrative that disappointed once again.

In fact, it was even worse: as Morgan Stanley’s Robert Rosener write overnight, “wage pressures in March were supported almost entirely by a massive jump in earnings in Professional & Business Services. Outside of this bright spot, wages in other industries were muted, and suggests wage growth in a broad range of industries may be leveling off, or even slowing.



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