Dec
08
Still going:
ByThe latest job data is out and the U.S. added another 132,000 jobs in the month of November. Even more telling, U.S. wages grew by a total of 4.1 percent over the last 12 months, which is higher then the rate of inflation.
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4 Comments
December 8th, 2006 at 4:44 pm
It took an enormous household and federal debt to generate a weak job recovery. There are enormous structural problems with the economy.
The economy needs roughly 150K jobs a month to signal a strong market.
December 8th, 2006 at 5:19 pm
Federal debt of less then 3% of GDP is not enormous.
Second, 4 million jobs created is not weak.
Third, an unemployment rate of less then 5% is considered full employment.
December 8th, 2006 at 5:32 pm
4 millions jobs is underwhelming going into the 5th year of a cycle.
The unemployment rate is easily manipulated. If it was calculated in the manner that Europeans do it, the rate would be a lot higher. The number of ‘long-term’ unemployed has not moved much.
Enormous is household debt in relation to federal debt. The point is that the average person has taken on a lot of debt(negative savings rate) without corresponding wage growth.
If the economy were operating at full employment, the wage growth that you speak of would create inflation. Core inflation seems to have peaked while wages are accelerating.
The point of this is that Republicans shouldn’t need to explain a strong economy with statistics. The ‘average joe’ should see it in his paycheck. Clearly that hasn’t happened and that’s why the ‘populists’ are winning.
December 12th, 2006 at 3:22 pm
The average Joe has not seen drastic wage growth in their paycheck because the Fed has done a great job of controlling inflation. No company is going to give a raise that is drastically higher than the core inflation rate. Even our own Social Security System decides its increase to recipients based on the current rate of inflation. If you want to blame anyone for a lack of wage growth, blame the fed.
Further American’s fail to realize that though their wages are not growing at a 1970’s type pace, their purchasing power has. The cost of things like clothes, electronics, food and other items have either remained flat or have gone lower over the last then years, which effectively give Americans a raise.