Interesting graph

[charrison]

 

 

[conjur]

Let's look at the article's text related to that chart:

Growth is strong, commodity supplies are stretched, and consumer prices have begun to accelerate, rising by 3.1% in the year to May, after an increase of 2.3% in the year to April. The Fed?s statement noted that that there were risks?both upside and downside?to the attainment of price stability. Though recent inflation figures were ?somewhat elevated?, much of this was due to a spike in oil prices, which the Fed hopes will not be repeated and trusts will not lead to higher inflationary expectations. The Fed?s pace of tightening may become a little less measured if this assumption fails to hold.

The Fed?s pace will also depend on how America?s households respond to its putting. By cutting rates so savagely from 2001 to last year, it openly invited households to borrow, and they heartily accepted. Their debts now total about 115% of their disposable income. Wednesday?s decision may not add greatly to the cost of servicing this burden?more than 70% of household debt is made up of fixed-rate mortgages?but it will discourage new borrowing. One of the most important sources of demand for the American economy, the uninhibited spending of unearned money, may thus begin to dwindle. Unless earned income or foreign demand replaces it, the economy will slow. And America?s households may finally turn to the unfinished business that the last, mild recession never took care of: namely, a savings rate of little more than 2% of disposable income.

So, actually, inflation has now outpaced the rate of growth for wages.

 

[charrison]

Originally posted by: conjur
Let's look at the article's text related to that chart:

Growth is strong, commodity supplies are stretched, and consumer prices have begun to accelerate, rising by 3.1% in the year to May, after an increase of 2.3% in the year to April. The Fed?s statement noted that that there were risks?both upside and downside?to the attainment of price stability. Though recent inflation figures were ?somewhat elevated?, much of this was due to a spike in oil prices, which the Fed hopes will not be repeated and trusts will not lead to higher inflationary expectations. The Fed?s pace of tightening may become a little less measured if this assumption fails to hold.

The Fed?s pace will also depend on how America?s households respond to its putting. By cutting rates so savagely from 2001 to last year, it openly invited households to borrow, and they heartily accepted. Their debts now total about 115% of their disposable income. Wednesday?s decision may not add greatly to the cost of servicing this burden?more than 70% of household debt is made up of fixed-rate mortgages?but it will discourage new borrowing. One of the most important sources of demand for the American economy, the uninhibited spending of unearned money, may thus begin to dwindle. Unless earned income or foreign demand replaces it, the economy will slow. And America?s households may finally turn to the unfinished business that the last, mild recession never took care of: namely, a savings rate of little more than 2% of disposable income.

So, actually, inflation has now outpaced the rate of growth for wages.

Fine your right, everything is going to hell in a hand basket.
Wages for the most part have been growing faster than inflation(and inflation is still below average in historical terms), and you want to cherry pick one datapoint where inflation did rise faster than wages.

 

[etech]

Though recent inflation figures were ?somewhat elevated?, much of this was due to a spike in oil prices

The price of gasoline has already dropped here from its highs. My salary hasn't dropped.

Do you have any later information to back up your FUD conjur?

 

[conjur]

Cherry pick one datapoint?

It's over a year timeframe. I wouldn't call that minor by any stretch of the imagination.

And, I never said "everything is going to hell in a hand basket". I have said we are on a start of a recovery. I just want the Bush fans to realize it's not all glorious news. The bulk of the benefits/profits are on Corporate bottom-lines, not peoples' wallets. But, it's a start. We have a long way to go still.

 

[charrison]

Originally posted by: conjur
Cherry pick one datapoint?

It's over a year timeframe. I wouldn't call that minor by any stretch of the imagination.

And, I never said "everything is going to hell in a hand basket". I have said we are on a start of a recovery. I just want the Bush fans to realize it's not all glorious news. The bulk of the benefits/profits are on Corporate bottom-lines, not peoples' wallets. But, it's a start. We have a long way to go still.

Yes, we are on the road the recovery. And what you see happening is what happens with every recovery. The economy picks up, inflation starts to rise. This happens everytime, so quit acting surprised. I have never claimed all economic news is glorious, but i am sure if folks like you doing your damnest to talk down the economy. All in all the economy is pretty good shape right now.

 

[conjur]

Originally posted by: charrison

Originally posted by: conjur
Cherry pick one datapoint?

It's over a year timeframe. I wouldn't call that minor by any stretch of the imagination.

And, I never said "everything is going to hell in a hand basket". I have said we are on a start of a recovery. I just want the Bush fans to realize it's not all glorious news. The bulk of the benefits/profits are on Corporate bottom-lines, not peoples' wallets. But, it's a start. We have a long way to go still.

Yes, we are on the road the recovery. And what you see happening is what happens with every recovery. The economy picks up, inflation starts to rise. This happens everytime, so quit acting surprised. I have never claimed all economic news is glorious, but i am sure if folks like you doing your damnest to talk down the economy. All in all the economy is pretty good shape right now.

I am not doing my "damnest to talk down the economy". I'm just trying to bring the elation down to reality level. There are plenty clamoring this as the greatest expansion in decades.

 

[charrison]

Originally posted by: conjur

Originally posted by: charrison

Originally posted by: conjur
Cherry pick one datapoint?

It's over a year timeframe. I wouldn't call that minor by any stretch of the imagination.

And, I never said "everything is going to hell in a hand basket". I have said we are on a start of a recovery. I just want the Bush fans to realize it's not all glorious news. The bulk of the benefits/profits are on Corporate bottom-lines, not peoples' wallets. But, it's a start. We have a long way to go still.

Yes, we are on the road the recovery. And what you see happening is what happens with every recovery. The economy picks up, inflation starts to rise. This happens everytime, so quit acting surprised. I have never claimed all economic news is glorious, but i am sure if folks like you doing your damnest to talk down the economy. All in all the economy is pretty good shape right now.

I am not doing my "damnest to talk down the economy". I'm just trying to bring the elation down to reality level. There are plenty clamoring this as the greatest expansion in decades.

and when you compare it to decades old economic data it is.

 

[StageLeft]

Not surprising. The general public has no grasp on basic finances. They don't plan for the future and claw themselves from paycheck to paycheck while trying not to sink.

 

[conjur]

Originally posted by: charrison

Originally posted by: conjur

Originally posted by: charrison

Originally posted by: conjur
Cherry pick one datapoint?

It's over a year timeframe. I wouldn't call that minor by any stretch of the imagination.

And, I never said "everything is going to hell in a hand basket". I have said we are on a start of a recovery. I just want the Bush fans to realize it's not all glorious news. The bulk of the benefits/profits are on Corporate bottom-lines, not peoples' wallets. But, it's a start. We have a long way to go still.

Yes, we are on the road the recovery. And what you see happening is what happens with every recovery. The economy picks up, inflation starts to rise. This happens everytime, so quit acting surprised. I have never claimed all economic news is glorious, but i am sure if folks like you doing your damnest to talk down the economy. All in all the economy is pretty good shape right now.

I am not doing my "damnest to talk down the economy". I'm just trying to bring the elation down to reality level. There are plenty clamoring this as the greatest expansion in decades.

and when you compare it to decades old economic data it is.

mmm hmmm.

That's why wages are stagnant compared to inflation.

 

[charrison]

Originally posted by: conjur

Originally posted by: charrison

Originally posted by: conjur

Originally posted by: charrison

Originally posted by: conjur
Cherry pick one datapoint?

It's over a year timeframe. I wouldn't call that minor by any stretch of the imagination.

And, I never said "everything is going to hell in a hand basket". I have said we are on a start of a recovery. I just want the Bush fans to realize it's not all glorious news. The bulk of the benefits/profits are on Corporate bottom-lines, not peoples' wallets. But, it's a start. We have a long way to go still.

Yes, we are on the road the recovery. And what you see happening is what happens with every recovery. The economy picks up, inflation starts to rise. This happens everytime, so quit acting surprised. I have never claimed all economic news is glorious, but i am sure if folks like you doing your damnest to talk down the economy. All in all the economy is pretty good shape right now.

I am not doing my "damnest to talk down the economy". I'm just trying to bring the elation down to reality level. There are plenty clamoring this as the greatest expansion in decades.

and when you compare it to decades old economic data it is.

mmm hmmm.

That's why wages are stagnant compared to inflation.

If you call wages that rise faster than inflation more often than not, stagnant, i guess they are.

 

[conjur]

2.4% wage increase.
3.1% inflation.

Hmm...you tell me?


Or, going back to the purely April numbers:

Wages rise 2.4%
Inflation is 2.1%

I call a 0.3% increase stagnation. It's a negligble increase.

 

[charrison]

Originally posted by: conjur
2.4% wage increase.
3.1% inflation.

Hmm...you tell me?


Or, going back to the purely April numbers:

Wages rise 2.4%
Inflation is 2.1%

I call a 0.3% increase stagnation. It's a negligble increase.

How does it compare to historical data?

 

[conjur]

<shrug>

Why don't you go check it out and report back to us?

 

[charrison]

Originally posted by: conjur
<shrug>

Why don't you go check it out and report back to us?

There will be zero growth in "burger-flipper jobs" relative to the overall labor force, according to U.S. Department of Labor projections for 2002-2012.
...

Multiple indicators show big pay gains in recent years. Real disposable income per capita is 7.5 percent higher than it was in January 2001. Annual real income per capita--a broader measure of quality of life--is up 5.2 percent ($1,819) in the United States over the same period. That is real money, after inflation, that would pay for an extra 900 gallons of gas for every American.

In May, average hourly earnings rose by 0.3 percent, but prices of consumer goods rose by even more, meaning that real earnings declined by 0.4 percent. This decline was driven mainly by the spike in gasoline prices, which is already fading.2

Real hourly earnings are up by 1.61 percent since March 2001, when the recession began; up 2.37 percent since President George W. Bush was inaugurated; and up 8.87 percent over the past 10 years. One advantage of earnings data is that they count only "production or nonsupervisory jobs," so they are not skewed by rich incomes, but the downside is that they are also limited to traditional payroll jobs since the source is the Current Employment Statistics (CES) survey.

linkage

 

[conjur]

Hmmm...a conservative think-tank.

Not biased, is it??

BTW, your snippet mentions "Real hourly earnings are up by 1.61 percent since March 2001). So, inflation has been more than that. That means real hourly earnings are LOWER than the pace of inflation. That doesn't sound very robust to me.

Also, the debt chart shown earlier shows debt is 115% of disposable income. People are in over their heads. Something has to come crashing down eventually.

 

[M0NEYSH0T]

I don't like debt.

 

[charrison]

Originally posted by: conjur
Hmmm...a conservative think-tank.

Not biased, is it??

apparently it is not, as you agree with part of it

BTW, your snippet mentions "Real hourly earnings are up by 1.61 percent since March 2001). So, inflation has been more than that. That means real hourly earnings are LOWER than the pace of inflation. That doesn't sound very robust to me.

it also shows people have more disposable income and has a valid reason for the recent spike in inflation. Current inflation rates are about what they have been for the past 10 years.




Also, the debt chart shown earlier shows debt is 115% of disposable income. People are in over their heads. Something has to come crashing down eventually.

I thought we had already agreed that this is only part of the picture. If lower interest rates allow one to buy a bigger house, why would you not? For every 1% drop in interest rates, one can buy about 10k more house.

Like i said earlier, you might say you dont respect the folks at DU, but you fit right in with your negative economic views.

 

[conjur]

Originally posted by: charrison

Originally posted by: conjur
Hmmm...a conservative think-tank.

Not biased, is it??

apparently it is not, as you agree with part of it

BTW, your snippet mentions "Real hourly earnings are up by 1.61 percent since March 2001). So, inflation has been more than that. That means real hourly earnings are LOWER than the pace of inflation. That doesn't sound very robust to me.

it also shows people have more disposable income and has a valid reason for the recent spike in inflation. Current inflation rates are about what they have been for the past 10 years.




Also, the debt chart shown earlier shows debt is 115% of disposable income. People are in over their heads. Something has to come crashing down eventually.

I thought we had already agreed that this is only part of the picture. If lower interest rates allow one to buy a bigger house, why would you not? For every 1% drop in interest rates, one can buy about 10k more house.

Like i said earlier, you might say you dont respect the folks at DU, but you fit right in with your negative economic views.

I don't have negative views on the economy. I have realistic views on the economy.

I see disparate news: more jobs; wages not rising; record #s of foreclosures and personal bankruptcies; increasing debt-to-income ratios; increasing corporate profits

 

[Train]

Has anyone mentioned that Home ownership is at an All-Time high? that just might have something to do with overall debt.

 

[charrison]

Originally posted by: conjur

Originally posted by: charrison

Originally posted by: conjur
Hmmm...a conservative think-tank.

Not biased, is it??

apparently it is not, as you agree with part of it

BTW, your snippet mentions "Real hourly earnings are up by 1.61 percent since March 2001). So, inflation has been more than that. That means real hourly earnings are LOWER than the pace of inflation. That doesn't sound very robust to me.

it also shows people have more disposable income and has a valid reason for the recent spike in inflation. Current inflation rates are about what they have been for the past 10 years.




Also, the debt chart shown earlier shows debt is 115% of disposable income. People are in over their heads. Something has to come crashing down eventually.

I thought we had already agreed that this is only part of the picture. If lower interest rates allow one to buy a bigger house, why would you not? For every 1% drop in interest rates, one can buy about 10k more house.

Like i said earlier, you might say you dont respect the folks at DU, but you fit right in with your negative economic views.

I don't have negative views on the economy. I have realistic views on the economy.

I see disparate news: more jobs; wages not rising; record #s of foreclosures and personal bankruptcies; increasing debt-to-income ratios; increasing corporate profits

yes, but you only focus on the negative, there is much going right in this economy. All economic indicators will not always be positive at the same time, but the majority of them are now.

for instance record number of forclosures, i dont know if that is still the case. It was 12-18 months ago.
But at the same time home ownership is at a record high and there is very strong growth in the housing market.

 

[conjur]

Oh, there is definitely strong growth in the housing market. People upsizing their homes or getting a home for the first time. I hope to rejoin the ranks of homeowners in 3-6 months, myself.

Perhaps I am overstating my case a bit but when people up here spout it's the greatest recovery in decades, well, it's time for a reality-check.

 

[charrison]

Originally posted by: conjur
Oh, there is definitely strong growth in the housing market. People upsizing their homes or getting a home for the first time. I hope to rejoin the ranks of homeowners in 3-6 months, myself.

Perhaps I am overstating my case a bit but when people up here spout it's the greatest recovery in decades, well, it's time for a reality-check.

The reality is, there have been indicators that have gone to 20+ year and all time highs in the past couple of years.
You obiously wish to contest those numbers.

 

[conjur]

No, I know the rate of growth in the GDP has been very high in recent quarters. Trouble is, that boom isn't being seen in peoples' wallets.

 

[quikah]

Originally posted by: conjur


BTW, your snippet mentions "Real hourly earnings are up by 1.61 percent since March 2001). So, inflation has been more than that. That means real hourly earnings are LOWER than the pace of inflation. That doesn't sound very robust to me.

The definition of "real hourly earnings" are earnings after taking consideration of the effect of inflation on purchasing. So since real earnings have risen that means that wages have outpaced inflation.