U.S. Inflation Accelerates to Six-Year High, Eroding Wages

[DonViejo]

Source: Bloomberg News



By Katia Dmitrieva

June 12, 2018, 8:30 AM EDT Updated on June 12, 2018, 9:06 AM EDT

* Consumer price index rose 2.8% in May from a year earlier

* Inflation-adjusted pay unchanged over 12-month period

U.S. inflation accelerated in May to the fastest pace in more than six years, reinforcing the Federal Reserve’s outlook for gradual interest-rate hikes while eroding wage gains that remain relatively tepid despite an 18-year low in unemployment.

The consumer price index rose 0.2 percent from the previous month and 2.8 percent from a year earlier, matching estimates, a Labor Department report showed Tuesday. The annual gain was the biggest since February 2012 and follows a 2.5 percent increase in April. Excluding food and energy, the core gauge was up 0.2 percent from the prior month and 2.2 percent from May 2017, also matching the median estimates of economists.

The pickup in headline inflation partly reflects gains in fuel prices, though the annual gain in the core measure -- seen by officials as a better gauge of underlying inflation trends -- was the most since February 2017. While the Fed is widely projected to raise borrowing costs this week for the sixth time in 18 months, the path of inflation will figure into policy makers’ thinking on the pace of increases for the second half and in 2019.

The data “provide further evidence that inflation is moving towards the Fed’s objective,” and the central bank will continue on its gradual rate-hike path, said Kevin Cummins, an economist at NatWest Markets. The pay figures are “a reminder that you don’t need to necessarily get more aggressive in your approach because wages haven’t accelerated as much as they have in the past,” he said.

Read more: https://www.bloomberg.com/news/articles/2018-06-12/u-s-inflation-at-six-year-high-eating-away-at-wage-increases

[turbinetree]

1. The have's and the have not's.................what a country..............since 1980 wages

are still in effect and flat...........welcome to trickle down economics...........................

[RKP5637]

3. The Deplorables love it. It's what they want. High prices, low wages and few

benefits. They just can't wait until the US is totally a dystopian society.

[Iliyah]

2. We are going into a "R" to "D"

The "D", the wealthy may have to come down here and mingle with us.

[YessirAtsaFact]

4. Gee, what a surprise

The economy was already growing and the idiot repugnant goons throw in this tax cut.

We didn’t need any fiscal stimulus, so it triggers inflation.

Econ 101...

[IronLionZion]

5. The Fed will have to raise rates tomorrow

These assholes chose the worst time for tax cuts. We're going to wish we had that money for stimulus when the next recession hits.

"because wages haven’t accelerated as much as they have in the past,”

We'll see how much longer Arizona Iced tea can stay at 99 cents.

[Honeycombe8]

6. And....here we go.

The whittling away of what little expendable income many working and middle class people have. All the while, businesses complain of having to pay semi-decent wages. It's such a hardship on them, and if only they could cut those wages, it would CREATE jobs! Many jobs! Many people each working for a fraction of the pay that workers get now.

[lagomorph777]

7. ...and Turd's tariffs haven't even hit yet.

Unclear why he wanted to hand Democrats a gigantic economic campaign issue, but that's what he's done.

[progree]

8. Graphs of inflation-adjusted hourly earnings of production and non-supervisory workers

https://data.bls.gov/timeseries/CES0500000032

These are inflation-adjusted, expressed in 1982-1984 dollars:

Last 10 years:

Note the flattening since early 2016.

======================================================

Since 1970 (last 48 years), again inflation-adjusted, in 1982-1984 dollars :

Note we haven't reach the 1973 peak yet.

======================================================

Here are the nominal (without inflation adjustment) average hourly earnings of production and non-supervisory workers over the last 48 years:
https://data.bls.gov/timeseries/CES0500000008