All the economist’s maybe saying the American economy is running a full speed ….
But?
It seems like something else is starting to happen….
Donald Trump maybe the guy to blame….
At least for a good amount of it….
He’s got a tax cut that doesn’t have the money to pay for….
He’s got a budget that doesn’t have money to pay for….
He’s starting a trade war with the rest of world that is gonna cost American consumers MORE money….
And employers ain’t giving people raises….
And the Federal Reserve is raising interest rates?
What is wrong with THIS PICTURE…
Consumer prices rose 2.9 percent in the year since June 2017, a five-year high, while hourly wages fell 0.2 percent in the same period, according to federal data released Thursday.
The consumer price index (CPI) rose almost three percent over the past year, the highest annual increase since February 2012, according to federal data. But hourly wage earnings adjusted for inflation decreased despite record-low unemployment and U.S. businesses struggling to fill thousands of jobs.
Economists have struggled to understand why wage growth has lagged while unemployment lingers near 4 percent and growth nears closer to 3 percent of GDP. Consumer prices are starting to rise at levels close to the Federal Reserve’s target after years of meager increases.
The Fed is keeping a close eye on inflation as it proceeds with several planned interest rate hikes. The central bank is eager to prevent higher spending, tax cuts and the burgeoning trade war from driving prices to unsustainable highs.
Even so, the CPI rose only 0.1 percent in June, slightly below analysts’ expectations. Economists had expected increasing economic growth and consumer spending to drive further price hikes last month…..
I seem to remember something about how last year’s tax cut was a rising tide lifting all boats (to use JFK’s metaphor) and how ordinary American workers would soon see the difference in their pay packets.
Now, where in the world did I get that notion ? Anyone here have any hints ?
Hey DSD?
You mean Trump and the Republicans give away to the rich ?
Higher inflation will likely occur with increased government spending and reduced taxes. So economists were predicting this development and was one of the main reasons most economists opposed the Trump plan to borrow money for a tax cut.
More surprising is that wages would fall during a period of low unemployment. This is largely contrary to conventional economic theory.