Concern over the growth rate of wages may be misplaced, and retiring baby boomers are to blame, Ed Keon, portfolio manager at Prudential's QMA, told CNBC on Monday.
Keon's research indicates annualized wage increases of 3 percent to 4 percent—much higher than government data. "I think even below the surface that the rate of growth of wages might be even higher than the official numbers suggest. There's a bit of a headwind from baby boomers retiring and being replaced by less expensive workers."
"There's about 250,000 boomers retiring and claiming Social Security every month. And there's about net 500,000 people replacing them," he said in a "Squawk Box" interview. The assumption is boomers are making more than the younger workers replacing them.
In January's better-than-expected employment report, the government said Friday that average hourly earnings rose 12 cents—representing the largest monthly gain of the recovery and an annualized growth rate of 2.2 percent.
Treasury Secretary Jack Lew told CNBC, "We need more wage growth that people can really feel." But in the exclusive interview that aired Monday on "Squawk Box," Lew did say he believes the U.S. economy has turned the corner, with sustainable growth in business activity and jobs.