Bureau of Labor Statistics: Currently 7+ Million Job Openings – Third Quarter Wage Gains +3.3%….
The Bureau of Labor Statistics has released some remarkable economic data today. There are more than seven million current job openings [See Here] and the year-over-year average wage gains are 3.3% [See Here]
For more than three decades all U.S. economic policy was elevating Wall Street and diminishing Main Street. As a result the middle America blue-collar workers have not had wage gains keeping up with inflation for over 30 years…. Then came the era of Trump.
More than two years ago CTH began discussing the ramifications to a new emphasis on the economy outlined as a possibility of candidate Donald Trump’s economic policy outlook. Within the overall discussion we walked through the anticipated changes possible if A.) Trump won the election, and B.) Trump began instituting Main Street economic policyahead of Wall Street policy (the past 30+ years).
We discussed the new dimension that would occur between two economic engines (Main Street -vs- Wall Street) as three decades of policy shifted. CTH outlined statistical and measurable KPIs that would become visible in the space between the policy shifts.
Part of those discussions focused on energy costs, product costs (we explained how inflation would be weird), and importantly, wage rates. It takes several months of policy emphasis (actual outcomes), before the labor market wage rates would grow. We anticipated seeing that policy impact in Q2 of 2018, which was April-June 2018. When the BLS released their second quarter analysis of wage and benefit rates for American workers –SEE HERE– the rate of growth was 2.8%, the fastest increase in a decade.
At the end of the second quarter we shared the opinion that it was only the beginning of what was to come. Well, overall wage rate growth in Q3 has now climbed to 3.3%
BLS – Median weekly earnings of the nation’s 117.2 million full-time wage and salary workers were $887 in the third quarter of 2018 (not seasonally adjusted), the U.S. Bureau of Labor Statistics reported today. This was 3.3 percent higher than a year earlier, compared with a gain of 2.6 percent in the Consumer Price Index for All Urban Consumers (CPI-U) over the same period. (more)
Keep in mind these are “median increases”, there are several sectors well beyond the 3.3% average wage growth. Additionally, wages are increasing faster than inflation which specifically relates back to our analysis on the new dimension of MAGAnomics.
As the wage rate increases, and as the economy expands, the governmental dependency model is reshaped and simultaneously receipts to the U.S. treasury improve. There are more than seven million job openings.
More money into the U.S Treasury and less dependence on welfare/social service programs have a combined exponential impact. You gain a dollar, and have no need to spend a dollar – the saved sum is doubled. That is how the SSI and safety net programs are saved under President Trump. Everything revolves around growth.
When you elevate your economic thinking you begin to see that all of the “entitlements” or expenditures become more affordable with an economy that is fully functional.
As the GDP of the U.S. expands, so does our ability to meet the growing need of the retiring U.S. worker. We stop thinking about how to best divide a limited economic pie, and begin thinking about how many more economic pies we can create.
The economic models of the entire last generation+ are based on the assumptions of continuing multinational economics which advances, and has advanced, the interest of Wall Street over Main Street. They were driving a “service-driven economy” message.
The investing class economy, ie. another name for a ‘service-driven economy’, has been the only source of historic reference for approximately three decades. These talking heads convinced themselves that a “service driven economy” was the ONLY economy ever possible for the U.S. in the future.
Back in January 2017 Deutsche Bank began thinking about it, applying new models, trying to conceptualize and quantify MAGAnomics, and trying to walk out the potential ramifications. They began talking about Trump doubling the U.S. GDP growth rate when all U.S. investment groups couldn’t yet fathom the possibility.
It’s like waking up on Christmas morning every day to see the pontificating Fed struggling to quantify analysis of their surrounding reality based on flawed assumptions. They simply have no understanding of what happens within the new dimension.
Monetary policy, Fed control over the economy, is disconnected and will stay that way for approximately another 12-14 months, until Main Street regains full operational strength –and– economic parity is achieved.
As we have continued to share, CTH believes the paycheck-to-paycheck working middle-class are going to see a considerable rise in wages and standard of living. How high can wages rise?… that depends on the pressure; and right now the pressure is massive. I’m not going to dismiss the possibility we could see double digit increases in year-over-year wage growth in multiple economic sectors in several regions of the U.S.
Remember, as wages and benefits increase – millions of people are coming back into the labor market to take advantage of the income opportunities. The statistics on the invisible workforce varies, but there are millions of people taking on new jobs in this economy and the participation rate is growing.
Winnamins. We’ll need lots of them…
No comments:
Post a Comment