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Inflation hits 6-year high, wiping out wage gains for the average American


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The 2.9 percent inflation for the 12-month period ending in June is a sign of a growing economy, but it's also a painful development for workers, whose tepid wage gains have failed to keep pace with the rising prices.

http://www.chicagotribune.com/business/ct-biz-inflation-rates-20180713-story.html

 

Anecdotally, I think the boost to my paycheck was 3.5%. But what's even better is if what I saw is correct the boost to our paychecks isn't really due to lower taxes, it's just due to lowered default withholdings. So if that's right then a bunch of people are gonna have a REALLY nasty shock in the spring when they see a much smaller refund, or even find themselves owing money. :lol: (Conveniently after the midterms, of course.)

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30 minutes ago, SFLUFAN said:

From ShadowStats:

 

CPI-U if computed using the same measurements as 1990:

alt-cpi-home2.gif?hl=ad&t=1531409094

 

CPI-U if computed using the same measurements as 1980:

sgs-cpi.gif?hl=ad&t=1531409094

 

From my understanding (which could be incorrect), aren't a lot of standard costs not included in inflation calculations, like fuel costs and rent? Both of those have been increasing at much higher rates over the past few decades than other costs, which could explain the gap between the modern measurements and the old ones. All I know is that the government always says that inflation is 2 or 3%, yet in reality most people's costs are going up at a much higher rate, year-to-year.

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21 hours ago, CitizenVectron said:

 

From my understanding (which could be incorrect), aren't a lot of standard costs not included in inflation calculations, like fuel costs and rent? Both of those have been increasing at much higher rates over the past few decades than other costs, which could explain the gap between the modern measurements and the old ones. All I know is that the government always says that inflation is 2 or 3%, yet in reality most people's costs are going up at a much higher rate, year-to-year.

I know fuel is included in the calculation, and I believe landlords are surveyed about rental rates, but  I am not 100% sure on that one.

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Wage growth has been lackluster since the Great Recession. Recently, unemployment fell to one of the lowest levels since 1969 and business leaders keep complaining they can't find enough workers. Typically, companies raise wages sharply in this kind of environment, but average hourly earnings are still stuck below 3 percent, a low level historically.

 

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Wages aren’t growing when adjusted for inflation, new data finds

 

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According to the Labor Department, median weekly earnings fell 0.6% in inflation-adjusted dollars in the second quarter, compared to the same time period of 2017.

 

That’s now the third straight quarter where inflation has outpaced wage growth.

 

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6 minutes ago, SFLUFAN said:

Inflation-adjusted wagaes have been stagnant for nearly 40 years.

 

Do you have a good graph showing inflation-adjusted wages compared to raw wage gains? I've seen wages vs. productivity, but I'd love to get a good look at this one.

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2 hours ago, Signifyin(g)Monkey said:

A few more hikes and the yield curve will invert.

 

I smell recession a-comin’.   If we’re lucky it’ll take until mid- 2020 or something.

 

If it's gonna happen it should go to shit a month before the midterms. 

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