Why it's important to read beneath the headline in economy stories

Your wages are going up fast!
Did you know that?
Well, you would have known that if you had read today's headlines.

Wage inflation running higher than it has in a decade

The amount of money it costs businesses to employ workers surged in the first quarter to the fastest rate since 2007, underscoring the upward pressure on wages in a tightening U.S. labor market and improved bargaining position for workers.
The employment-cost index jumped 0.8% in the first three months of 2017, the Bureau of Labor Statistics said Friday. Economists polled by MarketWatch had expected a seasonally adjusted 0.6% increase.

Effin' awesome, amirite? Kind of makes you want to charge into your boss' office and demand a raise.
This Bloomberg headline takes that idea to the next level - all that extra money means workers will soon be spending cash like it's going out of style.

Fatter Paychecks Set to Perk Up U.S. Growth as Consumer Rebounds

Nuff' said (dusting my hands while walking away). Capitalism rocks.

Wait a second. What do the first two sentences of that glowingly positive Bloomberg article actually say?

Weak consumer spending slowed the U.S. expansion to a crawl in the first quarter, a setback economists view as temporary as wage gains buttress household confidence.
Americans spent at the slowest pace since 2009, while a pickup in inflation ate into their income growth, the Commerce Department’s gross domestic product data showed Friday.

Hold on. That doesn't sound positive at all. In fact, it sounds downright f'd up.
WTF?
If you scroll down you will find this cool chart.
wage1.png
Looks positive enough to me. I wonder what those words say underneath it?

At the same time, there are reasons to be cautious about signs of wage growth: The employment cost index isn’t adjusted for inflation, meaning the real gains to the consumer have been more tepid. And other indicators of compensation haven’t been quite as rosy -- average hourly earnings in the Labor Department’s employment report, for instance, were up 2.7 percent year-over-year in March, little changed from the average over the previous year.

Oh, now I get it.
It's all bullsh*t!
In fact, it's worse than bullsh*t.

Real disposable personal income rose at a 1 percent pace in the period, the weakest since the fourth quarter of 2013.

So the reality is that wage gains are either stagnant or falling.
Good thing people usually stick to the headlines.

consumption GDP_0.jpg

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Pricknick's picture

Those who do construction work for preppers are making good money. I know personally.
I love building rooms for people to store their powdered water in while the yards go fallow.
Who said "Can't fix stupid" first?
Thanks gjohn.

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Regardless of the path in life I chose, I realize it's always forward, never straight.

thanatokephaloides's picture

@Pricknick The Egyptian, Hermes Trismegistus, who is reputed to have lived around 4000 - 5000 years ago.

Wink

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"US govt/military = bad. Russian govt/military = bad. Any politician wanting power = bad. Anyone wielding power = bad." --Shahryar

"All power corrupts absolutely!" -- thanatokephaloides

it's all Trump's fault

Who was president in January again? And who's budget are we still under?

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@gjohnsit IIRC, we don't have a budget and haven't for some time, just a continuing resolution. While I join you in saying that Obama presented a tepid budget proposal, Ryan gets most of the blame for this mess.

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I've seen lots of changes. What doesn't change is people. Same old hairless apes.

@gjohnsit That diary used some snark in blaming D'ump, simply because D'mup suddenly started taking credit for the official unemployment rate after all his drivel during the campaign claiming the government faked the rates to help Hillary ("The real rate is 20%; some say 30% or 40%") . I mean, economics doesn't work that way--the GDP depends on momentum from months before. But if D'ump wants credit for the unemployment rate he suddenly loves, he owns the whole thing.

Next year's GDP will give us a better read on D'umpanomics. Especially as his stupid Muslim ban has already smashed the tourism industry (called the Trump Slump). Meanwhile, that 0.8% raise (so much more awesome than 0.6%!) will make it so much easier to pay those trendy $2000 a month rents . . . maybe in a few centuries . . .

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...to spew BS like that: Consumer spending is down but that's ok because wages will go up even though we don't have any evidence that wages will go up.

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Beware the bullshit factories.

dance you monster's picture

Does that wage growth cover only the lower tiers of a company's payroll, or does it include the C-Suite? I'm curious to know if the workers are experiencing even that piss-poor 1% rise that the Bloomberg article cites. We know C-Suite incomes are rising. That's no small part of the problem.

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Raggedy Ann's picture

they are shrinking. No raises at my university for five years and with insurance premiums increasing, we get to take home less. I've written LOE' s that were published in our university rag and our local rag. I speak up, but they've all got cotton in their ears instead of their mouths and don't give a flying fuck about me or the other 5,000+ employees.

This is propaganda to make us think our wages are increasing. Fkn brainwashing!

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"The “jumpers” reminded us that one day we will all face only one choice and that is how we will die, not how we will live." Chris Hedges on 9/11

@Raggedy Ann I can't keep up with rising costs.

My food costs more, as do everyday products, insurance costs more, and property taxes are scheduled to go up 35%.

Ugh.

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dfarrah

@dfarrah Never mind how everything you spend money on has gone way up in price (except gasoline, but even that has trended up lately).

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The Aspie Corner's picture

The tech industry is virtually nonexistent where I live (Florida, former space coast) and what little that's there is literally impossible to get into because the requirements for positions far outweigh the duties.

I also can't do retail or fast paced service work thanks to my disabilities so I am forever screwed.

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Modern education is little more than toeing the line for the capitalist pigs.

Guerrilla Liberalism won't liberate the US or the world from the iron fist of capital.

@The Aspie Corner This is a tip off that the employer wants an H1-B. He advertises a low position with star requirements, gets no resumes that fit, then goes to the government "proving" that he can't hire qualified Americans. A decades old scam.

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I've seen lots of changes. What doesn't change is people. Same old hairless apes.

earthling1's picture

Can't blind 'em with brilliance,
baffle 'em with bullshit.
They'll never know.
"Oh look, I got more money, think I'll buy a new phone".

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Neither Russia nor China is our enemy.
Neither Iran nor Venezuela are threatening America.
Cuba is a dead horse, stop beating it.

Song of the lark's picture

They are like sharp clawed crabs moving across a wide flat sandy beach, when suddenly the tide goes out. sure you might be unlucky enough to step on one and get pinched. But it is a the decades long debt Tsunami that is rolling the tide out and then suddenly back in...soon. We have used debt now in bubble stage to prop up our various rackets, health, education, false pension promises, etc. That along with various virtually unsolvable problems like population overshoot, resource depletion, climate change and thermodynamic collapse are coming for us. Don't fight the incoming tide, and try to find something that floats. Oh off topic but I saw the new movie "The Circle" about our oh so benign total surveillance state of existence. Everything we are typing here will never go away and will be used against us. The diarist of course has long been on the deep state "list". Just kidding!

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