posted on 12.02.14

As we start another winter season with record snowfall in Buffalo, it is with the hope that there will not be a repeat of the severe storms that occurred early this year in the eastern half of the country. While most of the economic losses suffered in the first quarter of 2014 were made up for in the second quarter, it was still a setback. Otherwise, the plain vanilla growth of the last few quarters is expected to continue into next year. The next cyclical high is forecast to occur in the middle of 2015, followed by a minor low at the end of 2016. A late 2015 slowing would match timing of the expected interest rate increases by the Federal Reserve.

One important indication of the recovery is the steady growth in employment. News stories often add that wages are not growing fast enough to keep up with inflation and that many people are either part-time or underemployed. The graph below shows a simplistic linear summery of inflation ($20.00 in 2005 = $24.31 in 2014). Average hourly wages in that period grew from $20.02 to $24.57. The minimum wage is well below that. Average hours worked are just returning to the 2006-2007 level. Hours worked per week range widely by industry, from 26.2 (hospitality) to 45.0 (construction).

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