American wages and jobs heading in the right direction
An economic weak spot may have turned a corner
National Economic Council Director Larry Kudlow, in a wide-ranging interview, discusses the January jobs report, China trade being impacted by the coronavirus and the development of 5G.
American paychecks are rising, catching up to the red hot job market.
Average hourly earnings rose 3.1 percent in January.
As U.S. employers added 225,000 workers, the 112th month of gains.
"The economy is getting off on the right foot," said Larry Kudlow during an appearance on Varney & Co.
There is more evidence wages may continue to keep growing around the 3 percent level.
U.S. productivity, which is directly linked to the country's standard of living, turned in it's best showing in nearly a decade in 2019, rising 1.7 percent, as reported by the Bureau of Labor Statistics (BLS) on Thursday.
While the increase was modest, Ed Yardeni of Yardeni Research, called the number "fabulous" and said it is a sign of better days to come.
"Last year's productivity growth was 1.7 percent, GDP has been growing at a little over 2 percent so we are getting more of our economic output from productivity, it is great for profit margins, it's great for real wages" he explained during an interview with FOX Business' Stuart Varney.
President of Yardeni Research Ed Yardeni argues productivity growth is one of the main causes of economic growth and that this bodes well for markets.
The last time productivity saw a robust jump was 2010 when it rose 3.4 percent since then it has been lagging the economic expansion, as has wage growth. However, in December, we saw evidence of a turn with year-over-year wages rising 2.9 percent, per the BLS.
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Rising wages may round out what is one of the tightest job markets in history. President Trump touted his record on jobs during The State of the Union on Tuesday.
"We have created 7 million new jobs - 5 million more than Government experts projected during the previous administration. Incredibly the average unemployment rate under my Administration is lower than any administration in the history of our country" he said.
President Trump touts economic and employment successes while delivering his 2020 State of the Union.
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