The average annual U.S. salary for full-time workers rose to a record high of $69,181 in November, according to the Federal Reserve Bank of New York.
That’s up 3.4% from the from $66,012 a year earlier, according to the bank’s Labor Market Survey.
Income gains are picking up steam in a job market that’s the strongest in five decades, providing support for real estate demand by making it easier for buyers to qualify for mortgages. The jobless rate was 3.5% in November, matching the September measure that was the lowest since 1969.
Employers are being forced to pay more as they competed to retain workers. The share of people who expected a job offer in the next four months rose to 37%. About 19% of those workers said they expected two or more job offers during that period.
“We have seen a strong positive trend in real median annual household income over the past several years, which is encouraging,” said Gordon Green of Sentier Research. “But, the course of inflation over the coming months and years will be critical.”
In other words, when prices for food and other necessities rise, it erodes the power of income gains. Inflation should remain muted in 2020, according to a forecast from the Securities Industry and Financial Markets Association.
The SIFMA forecast projected a gain of 2.2% in the Federal Reserve’s preferred gauge known as “core PCE.” That’s the government’s measure of Personal Consumption Expenditures minus volatile food and energy prices.
Average hourly earnings probably will rise 3.2% in 2020, compared with a gain of 3.1% in 2019, the SIFMA forecast said.
The average U.S. unemployment rate probably will rise to 3.8% in 2020 from 3.7% in 2019, Fannie Mae said in a forecast earlier this month. That would make 2019 the lowest annual average since 1969, and 2020 would be the second-lowest.