Go to Top

Tag Archives

Tag Archives: wages

Market Melt-Up: Caution – Sentiment in Nosebleed Territory

Since my last column, the Dow Jones Industrial Average (DJIA) did indeed hit 20,000 and has since gone well beyond.  Most of the post-election run-up initially appeared to have occurred in the November 8th to December 20th period when the index went from 18,333 to 19,975, a rise of 1,642 points (7.9%).  Over the next 44 days, until February 2, the DJIA was flat, actually losing 116 points.  But since …Read More

Strong employment, higher inflation means slightly higher interest rates

For some, the Bureau of Labor Statistics (BLS) report that 271,000 net new jobs were created in October was a surprise. But readers of my reports should not have been surprised. For at least the last year, I have commented on the underlying strength of the consumer, the service sector, housing, and the labor markets. And in the latest employment report, we have finally witnessed the first recognition that wages, too, are …Read More

CPI Says “Deflation,” But U.S. Households Face Inflation

Angst exists in the capital markets over the “deflation” issue. Basically, the markets are worried about a lack of demand which forces prices down, causes consumers to wait longer for the prices to fall further before they purchase, and ends up in a downward price spiral which leads to recession or worse. I’ve read plenty of this lately. This is simply not the case. Oil prices are a result of …Read More

Rising wages: Is Wal-Mart a precursor?

Originally published on Reno Gazette Journal’s website, http://www.rgj.com/story/money/business/2015/03/06/rising-wages-wal-mart-precursor/24537471/ For the past 18 months, the labor markets have been telling us to be bullish on the U.S. economy as the healing in that market precipitated economic strength. Those who could read those signals had a significant time advantage in the markets, as those signs emerged months ahead of the now-official view of the Fed that the labor markets are healing. In …Read More

Financial media fixated on threat of deflation

Originally published on Reno Gazette Journal’s website, http://www.rgj.com/story/money/business/2015/02/06/financial-media-fixated-threat-deflation/23010819/ As a financial markets economist, my job is to survey the economic landscape and identify trends and issues that might have a significant impact on economic activity (and then to worry about what those trends and issues mean for client portfolios). Normally, over the intermediate time horizon, such economic trends manifest themselves in financial asset prices. But that is not true in …Read More

Why “Average” Wage Rates May Be Misleading

Much has been made of Fed Chair Janet Yellen’s stance that the labor market still has a lot of slack. That message remained in the Fed’s September communique. As part of her justification, the Chairwoman points to the fact that the average hourly wage rate has remained at or near the “official” rate of inflation, and, therefore, real wage rates have been stagnant. The September jobs report, while showing considerable …Read More