Washington, D.C., United States—The U.S. economy continues to grow, and wages follow closely.
In August, wages grew 2.9 percent, the fastest rate of increase since the economy started to grow its way out of the Great Recession of 2009. An increase in new jobs has kept unemployment rate at 3.9 percent.
The recent wage numbers may indicate that a tighter labor market translates into higher hourly compensation.
For years, the labor market has been tightening as payrolls increased and the unemployment rate slowly fell. The rate of earnings growth, however, has not correspondingly increased. From mid-2010, the economy continued to add jobs at a rate of around 2 percent quarterly. Increases in average hourly earnings, however, didn’t come close to 3 percent until recently. Until now, wage growth didn’t correspond to a tightening labor market.