The BLS Real Earnings Report for August shows your average earnings decreased 0.3% for the month due to a rise in the CPI coupled with no wage gains.
Those who cheer declining purchasing power (notably Econoday), have even more good news to cheer about. Thanks to a 0.3% decline in the workweek, the average person is effectively taking home 0.6% less in August than July.
What could possibly be better other than even more inflation?
Current and Real Earnings, Private Nonfarm Employees
Production and supervisory workers did even worse.
No Disappointment
The good news keeps on piling up. To make less than 1% more than you did last year, you had to work more hours!
Let’s recap Econoday’s statement on the CPI earlier today.
“For the first time since February, core consumer prices did not come in below expectations, hitting the consensus with a modest but useful 0.2 percent gain. Despite lack of progress in the core, August results are not a disappointment and will definitely heat up support for the beginning of balance-sheet unwinding at next week’s FOMC.”
For more CPI details and mockery of Econoday, please see CPI Up 0.4% on Energy and Shelter: “Not a Disappointment”, Tiny Harvey Effect.
Mike “Mish” Shedlock
Those above us have an unlimited taste for cruel and unusual punishment, given but not taken.
Inflationary forces running amok …
…
September 8, 2017
If you love Target for incredible exclusive brands, super-chic collaborations and one-stop shopping for pretty much everything on your list, you’re going to really love this: We’ve lowered our prices on thousands of items, from cereal and paper towels to baby formula, razors, bath tissue and more
https://corporate.target.com/article/2017/09/save-big-during-target-run
More lower margins coupled with less buying power means a lower stock price…
Target?? LOL!!! their merchandise is crap as is their customer service and they are hardly price competitive with amazon.. seriously in todays job market with the UE rate of 4.3% you really have to have no other employment options and be on the brink of homelessness & food insecure before taking a retail job especially at a chain like Target
In the last year, I haven’t found anything at Amazon that wasn’t available cheaper somewhere else. Also, a lot of places are offering price match guarantees — which means you pick up the item in store today, instead of waiting for Amazon to ship it.
Amazon has been having serious counterfeit problems across all categories.
Amazon doesn’t make any money on its retail business, it gets 100% of its profits from AWS (web services), and a disturbing part of that revenue comes from advertising.
Proctor and Gamble, the largest advertiser in the world, recently announced that it is slashing online advertising spend. Several other firms (much smaller) followed suit. Online ads tend to get people with tiny attention spans, the consumer doesn’t get interested in the product or the brand. And there is zero control over where the ad gets posted. Its a mess.
Google and Faceplant had to issue refunds because a lot of the ad clicks have turned out to be “robots” clicking, not humans. Yet another reason why online advertising is a mess.
Can reduced ad spend continue to prop up three unicorns (Google faceplant and amazon)? The advertising isn’t going away, but that revenue is going to implode, taking earnings and P/E ratios with them.
Amazon isn’t buying brick and mortar stores because they think brick and mortar is going away.
Target crap no different than Amazon’s.
And Medex is spot on re Amazon’s pricing.
You are being fleeced if you regularly purchase from Amazon.
But most importantly women are making more and men are making less while productivity falls.
Three cheers for America!
The pie got smaller (once adjusted for cost of living), and wages got divided “equally” between mom and dad.
Mom’s old job (that used to be done for half of dad’s wages) now costs a nanny’s wages, plus citizens (not politicians) are expected to pay social security, medicare and withholding on the nanny’s wages.
Grandma and grandpa used to provide “free” childcare in exchange for the “free” extra room in the house… now grandma and gramps have to go into overpriced elder-care homes, while the nanny watches the kids.
Any way you score it, inflation adjusted total family income has dropped… a lot.
But we still have closet keynesians who refuse to admit their deflation story is BS
rents are still rising and up significantly from 2010 especially in the NYC area. Citywide the average rent is now over $3,000 a month and the median income is $72,000 a year
Real earnings, after discounting real cost of living, has been stagnant or in decline since at least 1965.
Absolutely…That’s one reason our Government had to fake the inflation statistics.
And why they had to abandon the harder to fake measure that was gold convertibility.
Dad and I had a conversation about how well off I’ve become. He had the gall to say that I was making money more than he ever did. I agreed, but then I also mentioned that when he was my age he had just finished putting one child through school and was putting the younger one through (1st year at the same time as my sister), had a paid off house, and enough CDs that the bank once gave him a new TV, grandfather clock and fantastic interest rates. Oh and the mortgage on his $22,000 house that he bought just before Nixon closed the gold window was paid off. Did I mention the only reason mom went back to work in the early 1980s was because she was bored with both us kids off at school all day?
But yea, I make more money than he ever did.
It’s not what you make, it’s how far it goes
Frugality is out of fashion. Could it be that saving have lost its appeal because perceptions of our future seem so bleak?
Are Millennials saving or simply spending money on junk?
{{Are Millennials saving or simply spending money on junk?}} you mean they using revolving credit card debt (where the average APR is still around 15%) for designer clothes and to eat out every night of the week and usually mommy & daddy make the rent & car payment
I’ll bet that when the median income declines below the subsistence level, Econoday and the cheap labor billionaires will throw a huge party….
Of course they will. And why not?
The problem isn’t them. Rather it’s the ones they have robbed, and keep robbing, who are pliantly doing as told. Blaming every ridiculous hobgoblin the partiers claim is “at fault” for the their situation.
From equally destitute, utterly unrelated, guys just trying to make ends meet halfway around the world, to some powertool with a microchip. Blaming anything at all really, except the ones that obviously ended up with all the money that was stolen. And is using some of it to throw the party you mention.
Excellent point. Or as I always say, “We get what we deserve.” Until people start marching on Washington with torches and pitchforks, I’m tired of all the whining.
LMAO – Article from click on detroit:
“Census data: Detroit poverty rate drops 4 percent in 1 year”
https://www.clickondetroit.com/news/census-data-detroit-poverty-rate-drops-4-percent-in-1-year
Going back to your article 2 days ago, “Real Male Earnings Below 1973 Level: Median Household Income Improvement Entirely Due to Rising Female Earnings” the following quote:
“thanks to a methodology change and rising incomes of women”.
Detroit City Council is probably burning a hole in next year’s budget celebrating this news… It never ends in detroit.
But, what if Hugh is right here? Wages being lagging in recoveries, he might be onto something.
http://www.zerohedge.com/news/2017-09-14/markets-are-wrong-hugh-hendry-shuts-down-his-hedge-fund-here-his-parting-letter
Inflation IS THE OBJECTIVE!! Pay off debt with debased currency! Its a scam! Debtors WANT inflation. Who are the biggest Debtors? Your govt!!
Lower real labor earnings, crushing levels of debt and continuing inflation portends lower sales which should result in lower corporate earnings. Shouldn’t stock market be trending downward through the 21’st century so far. Yet market continues at high level prices. Fundamentals don’t apply – this is why I can’t make money trading stocks.