On the eve of a monthly U.S. Commerce Department employment report, most builders' eyes will fix not on the top-line jobs creation data point, but rather to two other sub-variables that come with the release: unemployment and household wage growth.

Up until about a year ago, those two factors carried, perhaps, no less real significance, but their importance took second billing to the overall payroll headcount numbers, whose influence on stabilizing consumer confidence is material.

But now, wages and where they're going are obsessions of economists and real estate players of all stripes for good reason.

They're important enough that the Federal Reserve Bank of Atlanta has created a data tool it calls the Wage Growth Tracker that allows wonkish analyses and correlations among unemployment rate changes, market tightness, wage growth, and inflation. Understanding the dynamics and alchemy of these moving targets is critical, and it's what's keeping our furry friendly Fed governors up nights as they try to find the moment to press go on the next monetary tightening move this summer.

Atlanta Fed senior policy advisor John Robertson notes that wage growth and wage inflation are neither synonymous nor causally connected:

The Wage Growth Tracker better captures the wage dynamics associated with improving labor market conditions than rising labor cost pressures per se. For example, if firms are replacing departing workers with relatively low-wage hires, then the wages of incumbent workers could rise faster than do total wage costs (as this analysis by our colleagues at the San Francisco Fed shows).

There's other down to earth reasons to focus on wage growth as well, separate from the potential pressure on inflation. It has to do with secular, or structural household payment power, vs. cycle-fueled range-bound household income ups and downs.

The main question for builders being, "will household incomes, writ large, continue to stagnate? Or will technology and innovation give rise to a next leg of macro-economic growth?"

If nothing else, much of last decade's insanity for both the housing and broader economies traced to the sense that synthetic financial instruments, investments, risks and rewards might take the place of real household incomes as foundational to housing finance and global currency.

The consequences of that profound and malevolent false sense overshadow today's valid focus on whether and when truly new new economies can create greater productivity in workplaces that yield a virtuous circle of profitability, household income growth, economic confidence in earnings power, and legitimate credit and debt modeling.

Wall Street Journal staffer Greg Ip's analysis on economic stagnation concludes with a note of optimism:

In the long run, though, potential growth is a job for microeconomic, not macroeconomic, policy. It requires countless, painstaking fixes: raising labor-force participation with training and safety-net programs that don’t discourage work; investment-friendly tax and regulatory policies to incentivize investments that take years to pay off, if ever; and trade deals that let firms market their products to the entire world. It will also take some serendipity as firms keep hunting for the next miracle technology. No one foresaw how the information revolution would revitalize productivity in the 1990s, and the next such breakthrough will probably surprise us as well.

Here's an analysis from Pew Research senior writer Drew DeSilver on what's happening with wage growth in the current recovery cycle. DeSilver identifies the nation's wage-growth positive outliers over a 10-year cycle, which, added up and vetted for themes, suggest that the next 10-year cycle might produce a dramatically different list of such markets. Here's a few take-aways:

  • Most of the biggest inflation-adjusted gains in average weekly wages have occurred in metropolitan areas that have directly benefited from the boom in U.S. energy production – places like Midland and Odessa, Texas; Bismarck, North Dakota; Casper, Wyoming; and Houma and Lake Charles, Louisiana.
  • Most of the biggest inflation-adjusted gains in average weekly wages have occurred in metropolitan areas that have directly benefited from the boom in U.S. energy production – places like Midland and Odessa, Texas; Bismarck, North Dakota; Casper, Wyoming; and Houma and Lake Charles, Louisiana.
  • Several of the fastest-rising metros are university towns, such as Charlottesville, Virginia (the University of Virginia), Bellingham, Washington (Western Washington University) and Morgantown, West Virginia (West Virginia University). Others have significant health care industries, such as Rochester, Minnesota (the Mayo Clinic) and Sioux Falls, South Dakota (Sanford Health).
  • Real wages fell in 22 metro areas, none more so than Kokomo, Indiana. The average weekly wage in metro Kokomo was $839 in the third quarter of 2015, down an inflation-adjusted 13.5% from the same period in 2000. Kokomo, like many manufacturing-based cities, hadn’t fully recovered from the 2000-01 recession when the Great Recession struck, battering it even further.