We heard a bubblevision bobble-head early this morning predicting a good jobs report because the US economy purportedly remains “white hot”.
Sure enough, the BLS report hit at 8:30 AM and 10 minutes later Investor’s Business Daily trumpeted the white hot news:
Wage Growth Hits 9-Year High As Economy Adds 201,000 Jobs
Not quite so fast. What actually happened is that real wage growth ground to a halt in August—as in nichts, nada, nothing.
That’s right. The year-over-year CPI is running at 2.89% and the wage increase for private non-supervisory workers came in at 2.80%.
In fact, the real news is that since December 2015, nominal wages (blue bars) have slowly crept higher, inching up from 2.5% to 2.8% over prior year, while the CPI (orange bars) has been racing higher—from under 1% to nearly 3%. So inflation has gobbled up every bit of the recent wage gains.