The correlation between wages and purchases in the economic rebound that started in 2009 is 94%, according to the article.
“The consumer has really cleaned up their balance sheet — they’re growing consumption based on the rate of growth of their earnings, which at the end of the day builds a more solid foundation,” said Jacob Oubina, a senior economist at RBC, in the report. “We’d just like to see a little bit more credit usage, because it’s been non-existent.”
Yet easier credit alone won’t be enough to drive economic growth over 3%; it will also require bigger gains in wages and an improving jobs market, he added.
Consumer Discretionary Select Sector SPDR
