Soaring Inflation Means Britons Face Biggest Fall in Real Incomes in 30 Years

[mahatmakanejeeves]

ECONOMY | EUROPE ECONOMY

Soaring Inflation Means Britons Face Biggest Fall in Real Incomes in 30 Years

Inflation is shooting past wage growth in the U.K., as energy and food prices surge

By Isabel Coles and Jason Douglas
https://twitter.com/isabelcoles
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https://twitter.com/wsj_douglasj
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Feb. 14, 2022 5:30 am ET

LONDON—British households are facing the biggest fall in real incomes in 30 years as inflation gallops ahead of wage growth, a stark illustration of the challenge facing central banks as they try to tame prices without snuffing out recoveries from the pandemic.

The Bank of England forecasts that average incomes in Britain after accounting for wage growth, inflation, tax increases and benefit changes will fall by 2% this year—the steepest decline since comparable records began in 1990. The pinch is expected to hold back the broader economy just when it needs all engines firing to propel itself clear of the slump caused by the pandemic.

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[progree]

1. In the U.S. real hourly earnings for production & non-supervisory down 1.3% Jan over Jan

Real (meaning inflation adjusted) average hourly earnings of production and non-supervisory workers:
https://data.bls.gov/timeseries/CES0500000032
In 1982-1984 dollars:
January 2021: 9.84, January 2022: 9.71, down 1.3%
So much for greedy workers driving up inflation -- they are just trying to keep up with inflation, and not succeeding.

In regular ordinary dollars, i.e. not inflation adjusted:
https://data.bls.gov/timeseries/CES0500000008

Unlike the U.K number (2% decline) in the OP, I don't think the U.S. series above includes benefits and I'm sure it is before tax.

More on the January inflation report: https://www.democraticunderground.com/10142867148

Sorry, I tried to put in "ANOTHER" somewhere but couldn't find a place it would fit. Well, we could call this ANOTHER inflation report.

Thursday and another another-filled unemployment claims report is just 3 days away

[mahatmakanejeeves]

2. It's another country. NT

[progree]

4. ⇧ ⇧ ⇧ 👍 Indeed it is 😊 /nt

[SWBTATTReg]

3. I love these ridiculous adjectives 'soaring' and 'shooting past wage growth' in this article...

especially since inflation has been stuck in the basement forever it seems like.

Consumer demand has been pent up and thus, bound to drive things up in price. In the meantime, disruptions in the supply side of the fence have disrupted the normal flow of economic activities (remember the huge number of ships waiting offshore the US West coast?).

So, in short, don't believe the republicans when they try to beat down the mostly rosy economic forecasts, economic activity proceeding at a healthy clip under Pres. Biden.

Republicans are blaming people for not working, and literally everything else that's negative about this economy (I can't think of too many terrible things going on at the top of my head). As to people 'not working'? IMHO, I can't blame a lot of people since conditions in a lot of places hasn't been safe. But also, under rump, stimulus payments were made to businesses to encourage them to stay open, keep the payroll. Guess what? This program was riff w/ fraud, w/ tons of people who defrauded Uncle Sam for the money and they still didn't retain their payrolls. Guess who put this idiotic plan in place w/ no overhead? McConnell and trump.

Republicans are certainly no friends of the economic engine of prosperity in the US (and by this term, things are generally doing better for a lot of people, some wage growth is happening (finally decent enough too). Witness paul rand encouraging the striking truckers in Canada to come and block the Superbowl, and other cities. Why? Why is this thug encouraging the disruption of American economic activity when things have been so iffy over the last 2 years?

[progree]

5. From the BBC on U.K. inflation, non-paywalled

https://www.bbc.com/news/business-12196322

What is the UK's inflation rate and why is the cost of living going up?, BBC, Feb. 3, 2022

Inflation is at its highest rate for 30 years, having risen to 5.4% in the 12 months to December.

... right now, prices are rising so quickly that average pay is not keeping up (https://www.bbc.co.uk/news/business-60035312).

In the year to November 2021, regular pay, excluding bonuses and adjusted for inflation, fell 1%.

... Why are prices rising now? ... The main reason is the rising global price of energy.
...

And then finally there is a graph of their CPI, starting sometime in 2012

There's no forecast of what they expect inflation to be.

[progree]

6. Germany's producer price index up 24.2% December over December

thanks mostly to "jumping" energy prices (another jump in energy prices? )
https://www.democraticunderground.com/?com=view_post&forum=1014&pid=2870676

Also,

U.S. producer price index report that came out today, Tuesday Feb 15:
https://www.democraticunderground.com/10142870662

U.S. producer prices increased 1.0% in January (monthly increase),
and the annual increase (January over January) was 9.7%

to mahatmakanejeeves for both reports