Signs of hope for workers' wages

One widely cited reason for the U.S. economy's unsteady recovery from its worse slowdown since the Great Depression is the stagnant pay of U.S. workers. That's beginning to change, although at a slower rate than many economists -- all wage-earners -- would like.

According to government data, average hourly earnings rose 2 percent in September on a year-over-year basis, which is slightly higher than the inflation rate of about 1.7 percent for the same period. Total wage income, which includes supplemental bonuses, rose 5.1 percent as employment and hours worked ticked up.

"More wage income is definitely good news," said MoodysEconomy.com economist Scott Hoyt in an interview with CBS MoneyWatch.

The wage income figure, however, doesn't differentiate between high-income and lower-income workers, leading Jim O'Sullivan of High Frequency Economics to note that those income boosts show up more often in the compensation of top executives, where pay seems to never go down.

John Wood, vice chairman of recruiting firm Hedrick & Struggles, which focuses on job searches for CEOs and their direct reports, added in an interview: "I don't think we have ever been busier."

Among the sectors where demand for top talent is on the rise is retailing. J.C. Penney (JCP) and Aeropostale (ARO) have both rehired former CEOs who had been pushed out to make way for new corporate leaders who failed to deliver on the promises that they made.

But when it comes to the typical wage earner, pay hasn't made much progress in recent years. One reason it has been stuck for so long: During the slump, businesses learned how to do more work with fewer workers than they had previously, and few workers with jobs dared to move elsewhere. But that picture, too, is starting to change. Employers added 248,000 jobs in September, the 48th straight month of job growth. Unemployment fell to 5.9 percent for the first time in six years.

Unfortunately, one of the reasons for the fall in this key economic indicator is that many people who don't have a job have quit looking for work. Still, many experts expect the jobless rate to fall further in the coming months as the U.S. economy continues its slow but steady recovery. The question remains, though, whether more jobs will be matched by rising pay.

Under current conditions, "employers have faced little pressure to raise wages. Moreover, a significant share of the wage increases that they've provided has been offset by increases in workers' productivity (output produced per hour worked)," said Chad Stone, chief economist of the Center for Budget and Policy Priorities, in a statement about the September employment report. "Consequently, employers have been able to widen their profit margins significantly, even in the face of weak demand for goods and services that limited their ability to raise prices."

Still, wages did grow 0.4 percent in August over July, outpacing the period's 0.1 percent gain in consumer prices excluding food and energy, which should help consumers ahead of the December holiday season, when retailers earn most of their profit for the year.

The National Retail Federation is forecasting a 4.1 percent increase in holiday spending this year, an increase from the 3.1 percent gain seen in 2013. And some retailers, such as Walmart (WMT), Macy's (M) and Kohl's (KSS), are adding more seasonal workers this year than last year.

"We expect fourth-quarter consumer discretionary spending and confidence to outperform last year's fourth-quarter performance," said Chris Christopher Jr., director of consumer economics for research firm IHS in a client note. "Not because consumers have thrown caution to the wind. They have not. The big difference is last year's government shutdown spoiled holiday cheer and spending. In addition, other than food prices, most consumer price inflation is expected to be rather modest."

And at least a little more boost to Americans' wages would also make a difference.