Barack Obama claimed on Tuesday that wages in America are starting to pick up as America turns the page on the great recession. Whether the president’s optimistic verdict in his State of the Union speech is borne out is a critical question not only for US politics but for the Federal Reserve when it meets this week to consider interest rates.

Mr Obama appeared to base his assertion on a recent survey of 568 small businesses that pointed to higher pay intentions in the coming months. The government’s own headline monthly measure of earnings is far less encouraging, however, with average hourly earnings dropping 0.2 per cent in December from November and increasing only 1.7 per cent from the previous year.

This comes despite America’s strongest year for job creation since 1999 and an unemployment rate of 5.6 per cent, well below the heights of 10 per cent reached in late 2009.