May jobs report: excellent news on unemployment, underemployment, and wages HEADLINES: +223,000 jobs added U3 unemployment rate fell -0.1% from 3.9% to 3.8% U6 underemployment rate fell -0.2% from 7.8% to 7.6% Here are the headlines on wages and the braoder measures of underemployment: Wages and participation rates Not in Labor Force, but Want a […]
More evidence of increasing deflationary pressure on wages One of my pet peeves is that economics as a discipline needs to import the entirety of learning theory from psychology, not just parlor tricks like the endowment effect. For example, learning from models. To wit, once Jack Welch was successful in using a pay scheme at […]
Memorial Day 2018 For all those, of whatever race, creed, color, or nationality, who gave their lives so that government of the People, by the People, and for the People shall not perish from the Earth: < Gettysburg National Cemetery Antietam National Cemetery Arlington National Cemetery May they rest in peace.
$3 a gallon gas has returned! According to GasBuddy, as of this morning the average price of gas in the US is $3 a gallon: This is the highest in 3 1/2 years. YoY gas prices are up a little over 25%. I suspect that this is a significant psychological threshold. While it’s not a “shock,” […]
Dear Professor Krugman, Say Its Name!!! “Taboo” Paul Krugman is coming closer to embracing my “taboo” argument. A month ago I wrote that raising wages was becoming a taboo. I considered three alternative hypotheses: 1. monopsony (quoting Vox) [I]n recent years, economists have discovered another source: the growth of the labor market power of employers — namely, their […]
Real retail sales update for April 2018 It’s a slow start of the week, so let’s catch up on one of my favorite indicators, real retail sales, which were reported last week. First of all, adjusted for population, real retail sales have peaked a year or more in advance of each of the last two […]
The percentage of employees who don’t get wage raises; is the Taboo undergoing an “extinction burst”? I came across the below graph yesterday from the Kansas City Fed. It’s pretty shocking: It represents “wage rigidity.” In english, that means the percentage of employees who don’t get any annual wage increases. It speaks for itself. Nine […]
R.I.P. bond bull market, 1981-2016 On September 30, 1981, the 10 year US Treasury bond yielded 15.84%. It has not been that high since. On July 8, 2016, it fetched only 1.37%. It is unlikely to see that low rate again for a very, very long time. Those two dates likely mark the birth and […]
Real wage growth adjusted for gas prices One of the things I note from time to time in my discussions of wage growth is how much its fluctuation in real terms has been affected by gas prices. For example, in the middle of the worst recession in nearly 70 years, real wages actually went up! Why? […]
Real wages and unemployment update: April 2018 Now that we have the inflation numbers for April, let’s update the wage situation for ordinary Americans. Real wages YoY are only up +0.2%: More significantly, they are still down -0.3% from their most recent high 9 months ago: