The tight labor market is making wage growth great again.
On Monday, the Federal Reserve Bank of Atlanta revealed that the median U.S. worker saw a year-over-year paycheck increase of 3.9 percent in October, the fastest rate of growth since November 2008.
Apparently, it took a while for Americans to recognize and appreciate this robust wage growth — but over the past week, it has finally sunk in. After remaining negative for over a year, Gallup’s Economic Confidence Index has moved into positive territory.
That said, there are some strange aspects to Gallup’s findings. For one thing, Republicans appear to be acutely sensitive to the uptick in wage growth, while Democrats seem oblivious to it (or else to somehow view it negatively?):
Despite that quirk in the data, it seems safe to attribute the overall jump in economic confidence to the wage growth documented by the Atlanta Fed. What other recent event could have altered Americans’ perceptions of the economy this radically?