"Wages are Barely Growing"

Here's one of the twelve graphs from the latest Economic Outlook from John Fernald of the SF Fed:

 

[For more on wages, see here, then here.] Some quotes from the outlook:

On balance, it's probable that the economy has reached bottom and begun its slow recovery. The course going forward surely won't be smooth or painless, and clear risks remain.

With the lingering effects of declining wealth, a poor job market, weak income growth, and tight credit, consumption growth outside of motor vehicles has remained anemic.

Despite the risks, we still expect the return to positive output growth to begin in the current quarter.  We expect the recovery will gradually pick up steam over the next year or two.

The current recession is longer than any recession since 1933 and, in terms of GDP, is as deep as any in the post-war period.  Yet the forecast for recovery is anemic compared with historical experience.  The relative weakness reflects in part continuing tight credit conditions for households and businesses as financial institutions and markets slowly heal.  At the same time, as noted earlier, consumer spending is likely to remain relatively weak.  In the forecast, it takes 11 quarters, until the third quarter of 2010, just to get GDP back to its pre-recession level.

With the weakness in wage growth and the overall high degree of slack in the economy, little inflation pressure is evident in the near term.

[For more on how much we need to make up to close the GDP gap, and for the risks of a "double-dip," see here.]