Average Hourly Wages Have Risen by 1.9%

There is some good news for the economy. Even though the unemployment numbers have not shown a positive trend for a long time now, the wages are steadily rising, getting more money into the hands of consumers.

According to the recently released government’s monthly job report, the average hourly wages have risen by 1.9% over the past one year. In another analysis done by TrimTabs Investment Research, it was found that the wages and salaries have grown by 0.7% in February compared to the same period last year.

The hope from these positive indicators is that all this extra money in the hands of the consumers will increase spending, which in turn will give a positive swing to the economy. These numbers may also be the precursors to growth of businesses and stabilizing financial situation of companies. All this may just well be the signal that the job markets are likely to look up in the near future, bringing down the worrying unemployment rate, which has so far proved hard to deal with.

Charles Biderman, the CEO of TrimTabs, said that the increase of average wage number is encouraging and is a clear sign that businesses have started spending more. He also said that the companies are adding back hours for part time employees, who had their jobs converted from full to part time during the height of the recession. The year end bonuses that were paid out in February have also showed positive trends. Overall, it seems that slowly and steadily the businesses are gaining ground and are willing to spend more than they did last year.

However, disappointingly, the trend of job losses month after month has not reversed yet, and there is still major concern over this issue. There were around 4 million job losses last year and more people are still in danger of losing their jobs. That is a significant number of people who have to get back earning again, and that by no means is going to be quick or easy.

Some economists say that the increase in salary numbers might not be able to counter the spending power lost due to continuous and massive job losses throughout last year. In addition, with major snowstorms forcing many businesses to close temporarily in the eastern part of the country, the payrolls and hours numbers in the job report could turn out to be disappointing.