November 6, 2015

The sharp drop in oil prices over the last year has led to strong growth in real wages over this period, but there has been little change in the pace of nominal wage growth over the last five years. It is difficult to find any major sector with a clear pattern of accelerating wage growth. In manufacturing, where employers often complain about the difficulty in finding good workers, wages have risen by just 2.0 percent over the last year. In short, this is a much positive report than we saw in the prior two months. However, there is much in the report that indicates there is a still a large amount of slack in the labor market.