Registered Investment Adviser Caleb Lawrence
The major averages and the crypto currencies continue to attempt a recovery of their recent sharp losses with the major averages entering the final hour mixed on little real news, though we did get another last-minute budget deal, this time for 2-years. The Mortgage Bankers Association reports that mortgage activity increased .7% last week as refi’s gained .9% and purchase apps were unchanged. The 30-year contract rate for a jumbo loan increased for a 5th consecutive week, jumping .13% to 4.47%.
The recent uptick in the pace of wage gains over the last 12-months or so, while notable and widely reported aren’t quite as rosy as the mainstream media presents as once again the devil is in the details. Part of the issue is found in strong asset and rental income gains, something that only benefits the few, and not the many. The other issue relates to the statistical data and how it is presented and used. Going forward there will of course be a small bump compliments of the Trump debt laden tax handout for the 10% as a series of small one-time bonuses are provided to the rank and file. That said while it can be argued that wage growth has improved of late, so can the idea that it has slipped despite some 18 states increasing the minimum wage as of the beginning of the year. Further I believe based on the data that weakening wage growth is not only more probable it also follows what is now a lengthy trend of lower wage growth dating to the mid 90’s.