While workers remain frustrated at the lack of growth in their paychecks, economists are convinced that 2018 finally will be the year that wages pick up.
Friday's mediocre job report did little to dim those hopes that sufficient momentum is picking up for a breakout year for earnings.
The December payrolls report "is not super relevant because it [is] pre-tax reform," said Bryce Doty, senior portfolio manager at Sit Fixed Income Advisors. "In the next three to six months we are likely to see the budding emergence of increased wage inflation that will boost inflation expectations."
Doty's comments are representative of Wall Street experts who see the jobs market at or near full employment. The shrinking pool of workers can only lead to more wage growth, they argue, which in turn will boost the overall weak inflation picture that has vexed Federal Reserve officials.
They believe the tax reform package Congress passed in December will help add to wage growth. Multiple companies already have announced they are awarding bonuses based on a windfall from the slashed corporate tax level. Most American workers also will be seeing tax reductions.
The wage-growth argument, though, got only a marginal boost from the December numbers.
Average hourly earnings rose 0.3 percent for the month to reflect an annualized gain of 2.5 percent — both about in line with economist expectations but still around the prevailing levels that have kept wages in check for most of the post-recession period.