Why investors are wrong about US wage rises

Gripes over lack of wage growth in the US are misplaced as most investors have failed to differentiate average wages from total wages. Brian Wesbury from First Trust Advisors explains the difference.

The one thing more prevalent these days than World Cup fans, is dour, fearful, and doubting investors. So, when US real GDP contracted at a 2.9% annualised rate in the first quarter, these fearful investors thought they had finally been proven right. After all, says the conventional wisdom, the recovery is fragile – a ‘sugar high’ – which could disappear in an instant. But, US stocks recently hit all-time highs (again), while construction and housing, auto sales and durable goods orders, manufacturing and services have all increased in recent months. Jobs market And, most surpri...