Just a little free-floating nervousness re the business cycle to start out your week…

April 17th, 2017 at 4:57 pm

Over at WaPo, re current economic conditions.

I mention the slowing of real, blue-collar wages in the piece as something that’s important in terms of a constraint on consumer spending (70% of GDP, fyi). Their hourly pay has been flat over the past year, same with their weekly earnings. Basically, in 2015, their nominal pay accelerated as the job market tightened while inflation went south, riding on energy-price declines.

Since then, it’s reversed: the pace of their nominal wage growth has trailed off a bit, while inflation has picked up.

Take note, Yellen and co.!

Source: BLS

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One comment in reply to "Just a little free-floating nervousness re the business cycle to start out your week…"

  1. Smith says:

    Stagnant wages would be a mystery if didn’t already have data that U6 is elevated 1.1 million people beyond full employment and prime age workforce is elevated 2.2 million since the onset of the recession, just half returning would add another 1.1 million. The 2.2 million hidden unemployment means the 4.5% official unemployment rate is really closer to a recession induced 6%.

    Any economist who mentions full employment as if it was just around the corner is part of the problem. Case in point:
    “As for tail winds, I expect that as we close in on full employment, blue-collar pay should accelerate, which will boost consumer spending.”

    Why no mention we’re at least two years away from full employment? Why do that? I suspect it’s just to aggrevate me.


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