The New New New Normal – US wages rising

The New New New Normal – US wages rising

Courtesy of Joshua Brown, the Reformed Broker

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.

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