Today’s jobs report was yet another in a series of solid monthly updates, providing one more bit of evidence that the growing economy is finally reaching the labor market. Averaging over the past six months to filter out the monthly bips and bops, payrolls are up about 290,000 per month, or 3.5 million jobs per year if the recent pace sticks. That’s a historically healthy pace of job growth.

And yet, hourly wage growth, before accounting for inflation (this is a very important distinction, as I’ll show in a moment), is stuck in second gear and stubbornly unresponsive to the tightening job market. At the same time, two other factors are are boosting the buying power of weekly paychecks: falling prices and increasing hours worked per week.

It’s all in the chart above. Look at the bars on the far right: they show the growth of real, inflation-adjusted weekly earnings over the past year compared to two years ago. A couple of years ago, the growth in the real buying power of the average weekly paycheck was zippo, nada, nothing. But over the past year, it’s up almost 3 percent, or just about $24 per week in today’s dollars. That’s real money.

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But if you look at the first set of bars — the growth rate of hourly wages before inflation — you’ll see my point about second gear. They’ve been growing at around 2 percent for about five years with no sign of acceleration.

The second set of bars shows another, positive dimension of the improving job market. Weekly hours have picked up over the past couple of years.

The third set is the big story in terms of what’s driving the notable pickup in real weekly earnings: the sharp slowdown in inflation. A couple of years ago, prices were growing at the same rate as hourly wages. Weekly hours were flat, too, so real weekly earnings hardly grew at all, and the living standards of the average worker stayed flat. Now, with inflation hovering around zero, paychecks are going further. You fill up your tank a few times for $40 instead of $50 and it makes a difference.

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So what are the implications of all this. In fact, to me, they’re not as sunny as you might think.

First, we can’t count on freakishly low inflation and more weekly hours of work to get us out of our wage stagnation problem. The hourly wage is the DNA of living standards for working households, and we need to see it respond to job-market tightening. Otherwise, that last bar will start coming down before too long.

Second, the Federal Reserve needs to do a rethink on the rate of unemployment it believes to be commensurate with full employment. That rate is 5.4 percent, and unemployment is now 5.5 percent, so something’s off in the Fed’s calibration of full employment. Obviously, this is a critical issue for when it begins to raise interest rates to slow the economy.

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Third, these are average wage statistics. With all the inequality out there right now, it’s possible — I’d say likely — that real median wages are not doing as well.

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End of the day, no question the job market’s improving at a nice clip, and it’s great to see real gains finally boosting paychecks. And we’re way ahead of most other advanced economies of this score. But a close look at the dynamics in play show that we’re not yet out of the woods in the sense that the economic recovery is not fully and reliably reaching all of the working families that are in no small part responsible for our improved performance.

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