"One Sign That Long-Missing Wage Acceleration Could Be Emerging"

We're late to posting this but it's probably important, if for nothing else than giving the Fed a rationale for going ahead with plans they've already made.

From Real Time Economics, June 1:

The labor force is shifting toward better-paying jobs, even as overall payroll growth eases

The era of stubbornly weak wage growth could be coming to an end as the economy slowly shifts toward better-paying jobs from low-wage work at restaurants and stores.

Since the U.S. started consistently adding jobs in 2010, employment in three low-­wage categories–leisure and hospitality, retail and temporary help—had grown at a faster rate than overall private-sector payrolls.

Until this year.

Growth in other private-sector industries has outpaced gains in the three largest low-wage categories since February. It’s the first time such a shift has occurred during the expansion. And it could be a precursor to better wage growth as stronger job gains in fields that pay above-average wages lift the broader pay measure.

Average hourly earnings for all private-sector workers have been growing at roughly a 2.5% rate since late 2015. The pace stayed mostly stuck even as the unemployment rate steadily fell, touching 4.4% in April, matching the lowest level recorded since 2001. Wage growth has been slightly weaker for nonsupervisory workers.

Typically, economists would expect falling unemployment to coincide with better wage gains. When the unemployment rate was 4.4% in May 2007, wages for nonsupervisory workers were growing better than 4% annually. The last time the unemployment rate was lower, in May 2001, wages were up 4% from a year earlier.

But a large share of the hiring has occurred in the lowest-wage fields. Hospitality, retail and temp employment account for more than one in three jobs added since the recession ended in mid-2009. Each of those jobs pay at least 25% less than the average hourly earnings of all U.S. workers in April, $26.19 an hour.

“Those jobs are viewed as commodities, where workers don’t need a lot of training,” said Lara Rhame, economist at FS Investments. “It’s hard to advocate for better wages when you can be replaced in 48 hours.”

In contrast, better-paying jobs are more likely to flow to workers with more training or education. That should lift worker productivity, she said, making easier for employers to justify raises....MORE

See also:
QE-Unwind may start in September