Declining Wage Growth Trend Amid Lower Unemployment

Declining Wage Growth Trend Amid Lower Unemployment

As the current economic expansion cruises past a decade in length, the pool of available workers is shrinking. With the U.S. unemployment rate near historic lows, wage growth should be accelerating. However, after accelerating throughout much of this expansion, wage growth has recently come down from cycle highs. This is somewhat surprising given the continued decline in the U.S. unemployment rate. We expect stable unemployment to support wage growth in the 3% range in 2020. However, any deviation from this level could lead to changes in consumer and business confidence.