First the good news: Median usual weekly earnings for full-time workers rose 3.9 percent in the first quarter from a year earlier, the Labor Department said yesterday. That was the best gain since late 2008.
Nearly eight years after the recession ended, weekly pay is nearing the 4 percent annual growth pace that was reached in the prior two economic expansions. That’s a sign that the economy has returned to full health.
But there's some bad news: When adjusting for inflation, paychecks are growing more slowly than they were a year ago. Inflation is still fairly low, but higher than it was in 2015. When factoring in price changes, weekly earnings rose just 1.2 percent from a year earlier. That matches the fourth quarter of 2016 as the smallest advance since late 2014.