It's always simple to find measures that make a good economy look bad and a bad economy look good.
In 2004 it was job creation. You might remember how the
Times and every single other media outlet were mad because although the economy looked like it was turning around and getting stronger, the "Bush job deficit" was a signal that things were secretly bad.
But job creation was a lagging indicator. Now that 3 million jobs have been created, you don't hear much about it. Now you hear about inequality -- the new signal that things are secretly bad.
Inequality will turn out to be another lagging indicator, as this quarter wages increased really fast. In fact they rose so fast in the past six months, the AP had to use them as a
signal that things are secretly bad. Wages are an expense, and, oh no, employers might raise prices to pay for labor costs and that would be inflation!
This quarter's economic news:
Quote:
The second quarter increase followed an even larger 9 percent surge in labor costs in the first three months of the year, which was the biggest quarterly increase in nearly six years.
The first quarter figure was up sharply from a previous estimate that labor costs were rising at a much more moderate 2.5 percent rate in the first quarter. Labor Department analysts said the increase reflected more complete wage data.
While rising wages and benefits help workers, economists see the combination of slowing productivity and rising wage costs as a recipe for unwanted inflationary pressures.
The sharp jump in labor costs raised worries on Wall Street that the Federal Reserve may not be finished boosting interest rates to fight inflation.
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