Part 3: How much (more) money we're making:
Bottom Line: In today's third story breaking down the employment report from July we'll explore real incomes. The average hourly wage for all Americans is currently $26.39. Here are a couple of highlights:
- +3 cents per hour from July
- +2.5% year over year (flat)
- Average hours worked - 34.4 (down .1%)
The good news is that we're continuing to see consistently increased wages year over year. What's still evident however - is that we'll have a hard time sustaining 3%+ growth in the economy until/unless we see wages grow by at least 3% year over year. With about 70% of the US economic growth coming from consumer spending, we need to see real incomes improve by 3%+ to expect 3%+ sustained economic growth which hasn't occurred since 2005.
The upshot is that we're seeing gains within striking distance of that desired 3%+ level. We've averaged 2.5% income growth for four months now and the economy grew at 3% last quarter. It's not complicated. If we can eek out a bit more wage growth we have a real chance for that 3%+ growth economy. If Congress ever gets it's act together to do what they promised on taxes and perhaps healthcare - it might be possible.
Recently, I've talked about the prospects for a meaningful raise being the best entering 2018 that it's been since 2007. That remains the case. We're looking at record corporate profits and more political clarity (as compared to this time a year ago) entering the prime budget season for most companies. Knowing your value and being able to make your case for a raise could make this difference for you over the next couple of months - if you feel you're due for a meaningful raise entering 2018.