"Slower job growth. Just look at the November employment report - very soft if you average the last couple of months. But real earnings growth, average hourly earnings growth, up 3.7% on a year-on-year basis. And that helps to weather a little bit of this inflation pressure that we are feeling right now. And I think that's the true storyline."
"Folks are going to spend what they have, and that income growth piece is holding up. I want to be clear that is not true for everyone. And to your point, if we were to sort deconstruct by income demographic, the bottom 25% of income-earning households, those are roughly about those individuals making less than 40,000 a year. Those individuals have seen slower wage growth than everybody else."
Consumer spending showed resilience over recent quarters despite economic uncertainty and slower job growth. Real average hourly earnings increased about 3.7% year-over-year, which helped households absorb some inflation pressure. Aggregate income growth sustained spending momentum for many consumers, but the trend is uneven across income groups. Households in the bottom 25% (roughly earning under $40,000 annually) experienced slower wage growth and faced more acute inflation on essentials. Lower-income personal baskets concentrate on gas, groceries and housing, with at least two of those categories trending higher. Continued aggregate income growth is key to maintaining spending momentum.
Read at www.npr.org
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