by William Teach | February 8, 2014 6:48 am
The jobs report released Friday was bad. “Unexpectedly”. We seem to see quite a few of these. Though the White House always tells us “it is important not to read too much into any one monthly report.” But there was another little bomb within the report, and Nelson D. Schwartz at the NY Times performs a random act of journalism
For the more than 10 million Americans who are out of work, finding a job is hard. For the 145 million or so who are employed, getting a raise is even harder.
The government said on Friday that employers added 113,000 jobs in January, the second straight month of anemic growth, despite some signs of strength in the broader economy. The unemployment rate inched down in January to 6.6 percent, the lowest level since October 2008, from 6.7 percent in December.
But the report also made plain what many Americans feel in their bones: Wages are stuck, and barely rose at all in 2013. They were up 1.9 percent last year, or a mere 0.4 percent after accounting for inflation. Not only was that increase even smaller than the one recorded in 2012, it was half the normal rate of wage gains in the two decades before the last recession.
Don’t read too much into an anemic 0.4% after inflation for an entire year.
The stagnation helps explain why many people feel apprehensive even though the economy grew at a robust pace in the second half of 2013, corporate profits rose, the stock market boomed and the housing market continued to gain ground. The issue cuts across the American work force. In fact, white-collar workers did a bit worse than blue-collar workers last year in terms of wage growth.
Companies aren’t confident enough to spend, expand, create growth, which affects wages. The profits and stock market are outliers, but aren’t indicitive of the overall economy. This is the Obama economy.
This must be Bush’s fault, right? Even though he hasn’t been president since 1/20/2009, and the current pResident has even won a second term
“People are running in place in terms of their living standards,” said Ethan Harris, co-head of global economics at Bank of America Merrill Lynch. “There’s almost no growth in spending power.” As recently as 2008, when the economy sank deeper into recession and Lehman Brothers collapsed, wages still managed to rise by 3.5 percent, before inflation. But the combination of a backlog of workers left behind in the recession’s wake, as well as productivity gains resulting from new technologies, means salaries may not rebound anytime soon.
Of course, none of this could possibly be the fault of the Democrat in the White House nor the Democrats who control the Senate, none of who are interested in passing legislation that stimulates hiring and market based wage increases. Most in the White House, including Mr. Obama, have no idea what running a company feels like in the real world. They’ve never done it. Furthermore, their rules and regulations are stifling business, which will affect wages. Welcome to the “new normal”.
Crossed at Pirate’s Cove. Follow me on Twitter @WilliamTeach.
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