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45 » VISIT US ONLINE @ DSNEWS.COM TREASURY SECRETARY LEW SAYS MORE WAGE GROWTH IS NEEDED e U.S. Bureau of Labor Statistics (BLS) reported last monththat average hourly earnings increased by 12 cents from December to Janu- ary ($24.63 to $24.75), but U.S. Department of Treasury Secretary Jacob Lew said more wage growth is needed. Lew told CNBC even though the economy has experienced sustainable job growth—a higher-than-expected 257,000 jobs were added in January and a monthly average of 336,000 jobs created for the last three months, according to BLS—better wage growth is needed for the nation's economy to return to normal. "Over the last year, we've seen average wages going up, a little over 2 percent," Lew said in the interview. "We need more wage growth than that for people to really feel it, but it's something that's starting to be something that's a trend in the right direction. I think we've got to do everything we can to help drive that trend forward." According to analysts, such wage growth may be on the horizon for the coming year. e 12-cent increase BLS reported correlates with the findings of Fannie Mae's January National Housing Survey, which indicated 29 percent of Americans said their household income is "sig- nificantly higher" than a year ago and 48 percent surveyed expect to see their finances improve in the coming year. "A 0.5 percent jump in average hourly earn- ings was a welcome signal to American workers that recent months of robust hiring may finally lead to a much needed rising trend in wage gains," Fannie Mae chief economist Doug Dun- can said. "Together, our survey results and [the BLS] jobs report strengthens our expectation that stronger hiring and firming income growth will be the primary catalysts for a faster pace of housing recovery in 2015." Analysts agree higher wage growth is neces- sary for the nation's economy—and the housing market—to fully recover from the bust of 2008, due to the fact that wage growth is needed to keep up with rising home prices. "Overall, affordability for buyers in most markets will be well maintained in the context of strong job and income growth," CoreLogic chief economist Frank Nothaft said late January. e final January gauge of the University of Michigan/omson Reuters consumer senti- ment index turned in its highest reading in 11 years (98.1), largely due to an increase in personal finances—four out of 10 surveyed cited finance gains as the reason for the increased level of confidence, particularly among households with an annual income of $75,000 or less. While the survey estimated an annualized growth rate in hourly earnings of only 1.9 percent, the BLS' 12- cent gain represented an annualized growth rate ahead of that pace at 2.2 percent. "Consumers have now turned to wages rath- er than jobs as the primary characteristic they used to judge the performance of the economy," Richard Curtin, chief economist for the Surveys of Consumers. "It is time to say that we've turned a corner and we're now in an economy that's growing," Lew said. "It has sustainable growth. It's growth that is showing up not just in businesses but in jobs and we're now seeing wages go up a bit. I think this is a trend that needs to continue. We need to make sure that we do what we can to continue the growth. I think we're getting some benefit now from lower oil prices in terms of the economy getting a boost on top of that, so I'm feeling pretty confident that we're looking at a good period ahead."

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