By now you’ve probably read elsewhere that YoY wages for average workers actually declined slightly (-0.1%):
But the flatness goes back further: all the way to February 2016:
Real wages have only grown 0.4% in the last 2 years and 4 months.
So why is the consumer economy still growing? In part because the savings rate has declined:
Another reason for the growth, at least this year, which I’m unable to graph, is that on net there was about $4 Billion per month cut in withheld taxes, much and perhaps most of which is being spent.
Finally, let me update the graph on real aggregate wage growth, which shows that since their bottom way back in October 2009, they have risen by about 26%:
Basically, the improvement in the employment rate, plus the growth in average hours worked, is making up for the stagnation in real hourly wages.