“Wage growth is on a solidly, albeit slow, upward path” and “a more pronounced acceleration in wage growth will depend importantly on further gains in our diffusion index, as well as evidence that the broadening out of wages is touching more higher paying sectors of the labor market,” that’s according to Morgan Stanley’s US Economic’s research department, which concludes that while US wage growth has trended sideways around 2% per annum since 2010, (growth has risen to 2.5% over the past 12 months) more upside lies ahead for wages over the next year.
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The key to this forecast lies in wage diffusion, a trend Morgan Stanley’s Wage Growth Diffusion Index is designed...
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