The Imaginary Labor Shortage: Wage Growth Again Too Sluggish to Keep Up With Inflation

Latest news

    While businessmen have been complaining loudly about labor shortages for months, data from the government Thursday showed that wage gains trailed consumer prices in June.

    The consumer price index rose a seasonally adjusted 0.1 percent in June compared with May. Core inflation, which excludes volatile food and energy prices, rose 0.2 percent, the Labor Department said Thursday.

    Economists had expected both measures to rise by 0.2 percent. The lower-than-expected core inflation reflects the fact that the headline number was driven by higher energy prices, while the core figure was dragged down by price declines in furniture, clothing, and tobacco. Prices of hotel rooms fell 3.7 percent from the previous month. Oil prices have been up sharply.

    Compared with a year ago, consumer prices are up 2.9%, the largest gain since February 2012. Core inflation rose a more modest 2.3% in June from a year ago.

    Average hourly earnings were up 2.7% in June compared with a year earlier. As a result, average inflation-adjusted wages were about flat for the second month in a row.

    Prices are unlikely to keep outpacing wage growth. If wage growth remains low, consumer spending will likely drag, slowing economic growth.

    The slow pace of wage growth undermines the case many business leaders have been making for increased immigration to offset the alleged labor shortage. If anything, adding new workers is likely to slow wage growth even more, making a broader economic slowdown more likely.

    View the original article:

    The lower than expected core-inflation figure also implies that U.S. tariffs on steel and aluminum have not driven prices higher, as many critics of the Trump administration’s policies had predicted.

    In the same category are

    Chuck Grassley Gives Kavanaugh’s Accuser More Time After Missed Deadline Senate Judiciary Committee chairman Chuck Grassley granted another extension to Christine Blasey Ford, the California psychology professor who recentl...
    Future of Political Discourse at Stake: Farage Calls for Social Media ‘Bill of Rights’ to End Bias Nigel Farage has called for a Bill of Rights for social media users after tech giants were exposed for their bias against conservatives. Mr Farage tol...
    Donald Trump: Sen. Claire McCaskill ‘Loves the Swamp’ President Donald Trump criticized Sen. Clare McCaskill on Friday for her voting record in Washington, DC. “Claire McCaskill will never ever vote our w...
    Trump: Get Out and Vote in the Midterms ‘Because You’re Voting for Me in 2018’ President Trump delivered a rousing appeal to his supporters to get-out-the-vote for Republican candidates at a rally in Springfield, Missouri on Frid...
    Sen. Cory Booker Admitted to ‘Groping’ Female Friend at 15 A Star-Ledger columnist has revisited a piece written by New Jersey Sen. Cory Booker, in which he admitted to “groping” a female friend at age 15. On ...
    Kavanaugh Accuser’s Lawyers Refuse to Meet Grassley’s Final Deadline UPDATE: Approximately 90 minutes after the expiration of the 10:00 p.m. deadline, Chairman Grassley took to Twitter, where he made clear that, despite...

    Leave a comment

    Your email address will not be published. Required fields are marked *

    This site uses Akismet to reduce spam. Learn how your comment data is processed.