The New New New Normal – US wages rising

This morning the markets are shocked thanks to a year-over-year gain in US salaries and wages of 2.6%. The ten-year Treasury yield is now up almost 10% over the last four days.

I was at a BlackRock iShares conference last week where Morgan Stanley’s economist Ellen Zentner predicted almost this exact number and reaction:

Bonds are selling off hard on the news and stocks don’t know whether to laugh or cry.

Here’s the chart via Quartz:

us_wage_and_salaries_year-on-year_change_us_wage_and_salaries_year-on-year_change_chartbuilder

 

Josh here – obviously this stands in sharp contrast to the malaise depicted in Q1’s abysmal GDP release. Now of course, there’s no reason to believe that this is the start of a more meaningful trend. Every economist will tell you that the hallmark of the post-crisis period is the “growth scare” where it looks momentarily like we’re breaking into escape velocity. All big bets on this sort of thing have ended in tears so far.

 

 

What's been said:

Discussions found on the web