Put that way, current trends don’t seem so bad. The key will be whether or not another round of economic weakness or systemic factors drag growth down. At this point, that seems less likely, at least for the rest of the year, suggesting we may well see wage growth move back to post-crisis highs.
This is an essential part of the virtuous circle that drives economic growth: higher wages lead to more spending, which leads to faster growth, which leads back to higher wages. Conditions are as good as they have been since the crisis for that kind of self-sustaining process to start. In many ways, the quick recovery from the recent weakness suggests that’s just what will happen.
Brad McMillan is the chief investment officer at Commonwealth Financial Network, the nation’s largest privately held independent broker/dealer-RIA. He is the primary spokesperson for Commonwealth’s investment divisions. This post originally appeared on The Independent Market Observer, a daily blog authored by Brad McMillan.