Thursday, May 10, 2018

Labor and earnings update

Weekly data from the BLS is in. Wages went up 0.1%, but the increase was offset by increases in gasoline and housing, which rose 0.2%, leaving a  decrease in real earnings of 0.1%.

Wages have been stagnant, with overall real earnings not keeipace with incremental increases in food, housing and energy costs. These declines have the largest impact on those earning the least, as they often don't have discretionary expenses that can be limited to address the increased cost of necessities.

The employment numbers continue to contract, showing a labor market at it's tightest in 48 years.
The 4-week moving average was 216,000, a decrease of 5,500 from the previous week's unrevised average of 221,500. This is the lowest level for this average since December 20, 1969 when it was 214,500.

In 1968, the minimum wage was $1.60/hour, achieving a zenith in buying power. By comparison, the minimum wage would need to be $10.80 today.