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Wages and savings lag unemployment

With U.S. unemployment at record lows, wage growth has been slow to follow and has only recently returned to precrisis levels. Wage growth had been stuck below the 2.5% mark coming out of the crisis before inching up mid-2014. Meanwhile, savings set aside from workers' disposable income has been volatile. December's savings rate rose to 7.6% from 6.1%, likely in anticipation of rising interest rates.

The January reading from the U.S. Bureau of Labor Statistics showed that the unemployment rate was 3.9%, up slightly from September's 50-year 3.8% low. Unemployment peaked at 10% in December 2009. Year-over-year wage growth, as estimated by the Federal Research Bank of Atlanta, was about 3.8% as of Dec. 31, up from 2.9% 12 months earlier.