One more point on the hourly compensation estimates as they relate to this supposed labor shortage. As I wrote in examining the Beveridge Curve from a different, and ultimately more consistent, perspective: It just doesn’t work that way. In a real labor shortage, wage gains wouldn’t be modest because they couldn’t be modest. If they are modest, then the shortage [...]
If there is a boom here, I just don’t see it. Perhaps the term itself needs to be clearly defined. The common definition is a broad-based and sustained expansion, one that is beneficial to a wide cross-section of any society experiencing it. Since this is still nominally a capitalist system, eroded as it may be in some parts, “broad” would [...]
Though the BEA revised GDP slightly higher for Q3 2017, the government agency took hourly compensation out to the woodshed. On a quarterly basis, this metric of labor market wage pressures is often quite volatile. In Q4 last year, for instance, nominal hourly compensation was -4.5% Q/Q (annual rate), followed immediately by a 4.9% gain in Q1 2017. For Q3 [...]
Can we finally put to rest all notions that the US economy is at full employment and doing well, and therefore wage inflation is right around the corner? I suspect not. This dance has been ongoing for years now, continuing through what was nearly a recession, so there is little reason to believe that economists are so data dependent. The [...]
JOLTS figures for the month of April 2017, released today, highlight what is in the end likely to be a more positive outcome for them. It has very little to do with the economy itself, as what we are witnessing is the culmination of extreme positions that have been made and estimated going all the way back to 2014. At [...]
In addition to all the myriad indications of a serious labor market slowdown last year, despite the fact that the unemployment rate has been 5% or less since September 2015, and in all likelihood was that again in January, there is no indication of any acceleration in wages or earnings. None. The labor market just is not as it is [...]
According to the BLS’s latest figures, real hourly compensation increased 2.2% Q/Q (annualized rate) in Q3. Wages and earnings are being closely watched, of course, for signs of acceleration due to the so far ethereal full employment level. That idea is taken from the unemployment rate even though, as in November, it has been as much determined by the lack [...]
Stay In Touch