Data on wage inflation also suggest that the labor market has firmed up. Over the past year, average hourly earnings of production and nonsupervisory employees grew 2.2 percent, compared with 1.3 percent in the previous 12 months.
The wage growth is in line with the MIT billion prices index, which is also hovering around 2.0%. This growth is just beginning, after the decline as a result of the Great Recession. Given the amount of new money pumped into the system, in recent years, I fully expect wage inflation and the MIT index to accelerate in 2014.
So if I understand you correctly:
ReplyDelete1. The percentage of working age Americans with a job fell to 58.3 percent in October. That is the lowest that number has been since the year 2000.
2. The U.S. economy lost 623,000 full-time jobs in October.
3. The U.S. labor force participation rate fell from 63.2 percent to 62.8 percent in October. That is the lowest that it has been since 1978.
4. There is approximately one out of every four part-time workers in America is living below the poverty line.
5. There are now 102 million working age Americans that do not have a job.
But there is wage inflation according to the NYT??? And you believe them???
I got a 20% cut in pay earlier in the year. My healthcare costs went up 10X. Then later a 2.5% raise. So this inflation must be my fault. NOT.
ReplyDeleteQuick buy gold! It's been a great inflation hedge since 2011, when I'm assured by Wenzel there's been plenty of inflation.
ReplyDeleteOh wait...
Thanks for the thought provoking and well presented article.
ReplyDeleteYou write, Given the amount of new money pumped into the system, in recent years, I fully expect wage inflation and the MIT index to accelerate in 2014.
There has been a lot of new money pumped into the system, and it went into stocks and flowed over into wage inflation.
But please consider that money died, on October 23, 2013, when the Bond Vigilantes called the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%, this is seen in Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, trading lower in value.
The failure of the US Fed money printing operation can seen in M2 Money trending lower. The US Federal Reserve site shows M2 Money peaked on 10-21-2013 at 10,988, and has been trending lower: 10980, 10974, and now 10922. Just like fiat money, that is Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, died on October 23, 2013, M2 Money died when the bond vigilantes called the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%.
The bursting of the fiat money bubble, that is Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, will result in a new form of money, that being diktat money, where the components of M2 Money will be placed under capital controls and under transfer restrictions, and the factors of production, commercial businesses as well as trading organizations are overseen by regional monetary and economic cardinals, that is regional nannycrats, working in statist public private partnerships and workgroups to establish regional, security, stability, and sustainability in response to economic recession.
In the soon coming economic recession, there will be no capability for wage increases, that is for inflation in wages.