S&P 500 Is Getting Ready For Real Wage Growth

The S&P 500 is highly correlated to real wage growth and recent gains in the index may be anticipating faster wage growth under Donald Trump, that’s according to research from analysts at Jefferies.

S&P 500 Is Getting Ready For Real Wage Growth

According to Jefferies’s weekly chart update, when compared to returns of the S&P 500, real wage growth (average hourly earnings minus core CPI) seem to correlate well. However, figures show that although nominal wages have rebounded in the past year and a half, real wages have not which appears to suggest room to move higher for the index limited. That being said, past data also shows that you don’t typically see recessions without real wage growth first...