Note: Average hourly earnings is available for the private sector starting in 2006 and is released
in the monthly employment report. The BLS hourly earnings data for production and nonsupervisory employees, ~80% of the private sector, is available back to 1964.
Source: Investment Strategy Group, Haver.
Source: Investment Strategy Group, Haver.
Of course, the recent backup in interest rates is providing equity investors with another source of angst. Yet our work suggests there are several reasons why rates could continue to rise before becoming a material headwind for stocks. First, the 4% trend growth rate of nominal US GDP— reflecting 2% real growth and 2% inflation—remains comfortably above the 10-year Treasury yield of
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