A survey conducted by the Federal Reserve Bank of New York found U.S. consumers expect to see the fastest wage growth in years.
Consumers polled in January anticipated enjoying an average earnings rise of 2.73 percent, which is the largest monthly increase since the Fed starting collecting the data in 2013, according to Bloomberg.
“The data jibe with a Feb. 2 Labor Department report which showed that U.S. average hourly earnings rose 2.9 percent from a year earlier in January, marking the fastest pace of the expansion,” the news outlet explained.
Wages have been the last measure to see improvement since the end of the Great Recession, CNN Money reported.
The Federal Reserve poll also found 39 percent of consumers felt their personal finances were better than a year ago, and 46 percent believe they will be better in a year than they are now. Both statistics represent a high mark since the Fed began gathering the information.
“It’s too early to call this a trend but the breakout (in wage growth) is very welcome news,” said Robert Frick, chief economist at Navy Federal. “It’s a very big deal, let’s hope it continues.”
“There is no question that employers are now having to be more aggressive to compete for workers,” added Peter Harrison, CEO of Snagajob, a jobs platform focused on hourly work.
Hadley Heath Manning, policy director for the Independent Women’s Forum, told The Western Journal that rising wages are having a real impact on American families.
“These pay increases are long overdue after years of stagnant wage growth,” she said. “It’s easy to focus on economic indicators at the national level, but around the kitchen table these raises mean real changes for American families: new clothes or school supplies, a household repair, a vacation or additional savings for education or retirement.”
“It’s no secret why wages are finally rising: Tax cuts and deregulation are allowing businesses to share greater success with their workers,” Manning added.
Garrick Taylor, with the Arizona Chamber of Commerce, described the wage growth news as “very encouraging” and anticipated workers in The Grand Canyon State are well-positioned to reap the rewards of the new business climate created by the Republican tax reform law combined with the state’s already pro-business policies.
President Donald Trump tweeted on Sunday that over 4 million Americans have received bonuses and/or pay raises as a result of the tax reform bill passed in December.
House Speaker Paul Ryan also touted the impact of new tax law on Wednesday, saying it is responsible for helping create a very pro-business growth and pro-worker climate.
“In less than eight weeks, we have tracked nearly 350 companies that have handed out bonuses as a result of tax reform,” he told reporters on Capitol Hill Wednesday. “Every day we hear more about this, and we know that there are plenty of other small businesses who are doing the same, that are doing it under the radar.”
The speaker said by the end of the month, 90 percent of American workers will see higher take-home pay as a result of tax reform.
“This momentum is generating more confidence in our economy,” Ryan stated. “According to a new survey, a record number of small business owners say that now is a good time to expand.”
Bloomberg reported on Tuesday, “Six of the 10 components that make up the small-business optimism index increased in January, producing one of the strongest readings in the 45-year history of the survey.”
National Federation of Independent Business chief economist William Dunkelberg and policy analyst Holly Wade credit the tax law with producing the “most recent boost to small-business optimism.”
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