Wages are growing at the fastest rate since the recession — and that's an understatement
In July, average hourly earnings rose 2.6% over the prior year, the fastest pace since the recession.
But this number understates the wage growth we're seeing if we break down wages by geography.
This chart, which comes to us from Macquarie, shows a big acceleration in wages in non-oil states with wages in those states — Alaska, Louisiana, Montana, New Mexico, North Dakota, Oklahoma, Texas, West Virginia, and Wyoming — lagging the rest of the country notably following the oil crash we've seen over the past two years.
Macquarie
Macquarie notes that non-oil states, where wages were up 2.9% year-over-year in July, account for about 87% of national employment.
And as the price of oil stabilizes and the worst of the initial price crash impact dissipates, national wage growth has an additional tailwind to push higher still.
"Looking ahead, we expect wage growth in non-oil states to propel headline numbers higher," the firm writes.
"We also believe the drag from oil-states should lessen as there is growing evidence of a bottoming in activity levels. Mining & logging industry employment as a share of total employment has declined to its lowest level in over a decade, jobless claims in oil states have flattened out after rising for much of 2015, energy investment is near multi-decade lows, but appears to have reached a bottom."
Adding this with recent news on accelerating wages for the lowest-paid US workers and a dearth of available workers with skills employers really want, it appears the only solution for US corporates is going to be raising pay.