So don't break out the champagne about Friday's jobs report
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Trump said, “It’s raining jobs!” White House National
Economic Council Director Kevin Hassett claimed the job
market is "hitting on all cylinders.” The mainstream media called it a “blowout
jobs report,” “stronger-than-expected jobs
data,” the labor market’s “best
three-month stretch in more than two years.”
What all this acclaim left out was that wages are
falling relative to prices.
Average hourly earnings for private-sector production and
non-supervisory workers — that is, for most employees — rose by only 8 cents
(or 0.2 percent) in May. That’s the weakest pace of wage growth since 2021.
Meanwhile, prices are rising quickly — by around 3.8 percent
annually. Hence, real wages — that is, their actual purchasing
power — are dropping. The paychecks of most American workers aren’t covering
rising costs. They’re getting poorer.
It’s no cause for celebration that the American economy is adding a lot of jobs that are paying less. Hell, if paychecks keep shrinking relative to prices, there’s no telling how many jobs can be added. June’s job report could top May’s 172,000 new jobs.
There’s no limit to the number of terrible jobs an economy
can create. If inflation-adjusted pay keeps dropping, we could see many
hundreds of thousands of crappy new jobs per month. But most Americans would be
getting poorer and poorer.
Bottom line: Don’t fall for any breezy, celebratory focus on
the number of new jobs. Always ask: What about real
(inflation-adjusted) wages?
When real, inflation-adjusted wages are dropping, we’ve got
a real problem — regardless of how many jobs are being created.
This comment from reader Donald Hodgins is worth considering
Donald’s
Substack7hEdited
You can't believe any statistical information that comes out
of the Trump administration. Trump's meltdown during a recent interview with
Meet the Press showed the entire nation he isn't fit to lead a band let alone
this country.
