Free Republic

As the dust settles on the latest economic data, one thing is abundantly clear: inflation isn’t showing any signs of backing down, and the consequences are hitting people hard. Despite the Fed’s hopes for a return to normalcy, the reality on the ground tells a different story. According to Mish Shedlock, the latest figures from the BEA paint a bleak picture. While personal income saw a modest increase, real income actually took a hit in February. Meanwhile, personal spending surged, driving up prices even further. Inflation, though largely expected, remains stubbornly high, far beyond the Fed’s comfort zone.

Inflation and personal incomes rose in January, according to federal data released Thursday, another sign of economic strength that could delay long-anticipated interest rate cuts. The personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred gauge of inflation, rose 0.3 percent in January and 2.4 percent over the past 12 months. Monthly inflation picked up slightly from December, when the PCE index rose 0.1 percent, even as the annual inflation rate fell from 2.6 percent in the final month of 2023. Inflation without volatilte food and energy prices, known as “core” inflation, sped up to 0.4 percent gain in...

Family incomes dropped by about $2,000 last year on average, the U.S. Census Bureau estimated on Tuesday. Median family income has dropped every year since 2019, adjusted for inflation. The figure stood at $74,580 as of 2022, according to Census data, a 2.3 percent drop from 2021 levels. The change may reflect rising inflation, which has cooled in recent months but nonetheless hurt families’ bottom lines. Last summer saw inflation hit a forty-year high. Inflation slowed to 3.2 percent in July, down from over 9 percent a year before.

Stock market values have collapsed 20% this year compared to last. Many 401K and defined contribution pension plans have retirement benefits, or some portion, pegged to stock values. When those plans start registering their stock losses, there will be some decline in pension benefits for some segment of retireees. As that takes place that demographic will make adjustments including reduced spending in some areas. While that will be somewhat deflationary, it will also support an advancing recession. Together that could complicate some expected additional Fed Reserve rate increase(s). Its all a hot mess. In 2009, my Pension benefit lost $400+...

Living standards in Britain continue a death spiral as wages fail to outpace inflation amid soaring energy costs, according to new data. Bloomberg, citing data from the Office for National Statistics, said average earnings excluding bonuses for February dropped 1.3%, the most since 2013. Negative real wage growth indicates millions of Britons are falling behind despite a strong labor market. Unemployment fell to 3.8% in the three months through February, the lowest since late 2019 and on par with levels from the 1970s. However, the hot labor market will force the Bank of England to raise interest rates in May,...

Few people would deny that, as a rule, parents want what is best for their children and keep their children’s needs, including their material needs, in mind when they make important decisions for their families. If this eminently plausible supposition is correct, then there is clear evidence that government-authorized forced unionism makes it more difficult for parents to provide their children with a comfortable standard of living and good prospects for the future. At this time, 22 states have yet to adopt Right to Work laws protecting employees from being forced to pay dues or fees to an unwanted union...

Buried amid a deluge of nasty news ranging from the growing North Korean nuclear threat to killer hurricanes hitting our coasts, the Census Bureau reports that median household income, a broad gauge of family financial well-being, hit its highest level ever last year. That's another strong sign that the economy is trying to break out of its 10-year growth slump. The median household income last year was $59,039, up 0.7% from the previous record of $58,655 set in 1999, the year the dot-com boom went bust. Real median incomes for married households with both spouses working soared to $106,000 in...

Berkeley economist has stumbled on a trend an increasing number of Americans experience annually: We’ve had a pretend economy in the United States for at least 16 years. "Bottom 99% incomes grew by 3.9% from 2014 to 2015, the best annual growth rate since 1999," Emmanuel Saez wrote in a paper on June 30, 2016. A trio of researchers from the International Monetary Fund was much less oblique in a paper that they wrote last month on "the rise of income polarization — what some have referred to as the 'hollowing out' of the income distribution — in the United...

New-Home Sales Rise, Miss Strong wage gains give consumers the means to step up their spending The year's big economic trends continued Wednesday in one of 2015's last big batches of data releases: Consumer spending is solid, housing activity is rising but not accelerating, and manufacturing is treading water. The Commerce Department says that personal spending rose 0.3% in November, giving a solid start to the holiday shopping season. It followed a surprising flat reading in October. Solid purchases of big-ticket items such as cars and appliances led the way. Shoppers had the means to step up. Personal income grew...

“First, widening inequality is a very long-term trend, one that has been decades in the making. The degree of inequality we see today is primarily the result of deep structural changes in our economy that have taken place over many years, including globalization, technological progress, demographic trends, and institutional change in the labor market and elsewhere. By comparison to the influence of these long-term factors, the effects of monetary policy on inequality are almost certainly modest and transient.” That’s what Blogger Ben Bernanke (who is of course distinct from PIMCO advisor Ben and Citadel co-conspirator Ben) had to say earlier...

While the Obama Administration hatched a plan to make community college free, the White House plotted a change in the tax treatment of savings accounts parents use to pay for their children’s college education. “During his State of the Union address, President Obama proposed taxing 529 college savings plans,” Alexander Hendrie of Americans for Tax Reform (ATR) writes. “529 tax plans work by allowing families to deposit after tax funds into an account that then accumulates interest.” “When funds are withdrawn from the account to pay for college they are tax free.” These Education Savings Accounts (ESAs) allow parents to...

Yes you read that right, and an academic one, no less, much to the consternation of the circles he travels in. “I’m a philosophy professor specializing in ethics and political philosophy, and like many of my fellow academics, I’m a political progressive,” Philip Cafaro writes in The Chronicle Review. “I value economic security for workers and their families, and support a much more equal distribution of wealth, strong and well-enforced environmental-protection laws, and an end to racial discrimination in the United States. I want to maximize the political power of common citizens and limit the influence of large corporations. My...

If you’re a typical family, you’re considerably poorer than you used to be. No wonder the “recovery” feels like a recession. ... The median household in 2013 had a net worth of just $56,335 -- 43% lower than the median wealth level right before the recession began in 2007, and 36% lower than a decade ago.

As commencement approaches, this year’s graduating seniors can look forward to pep talks about how employable humanities majors are. “Upon graduating from college, those who majored in the humanities and social science made, on average, $26,271 in 2010 and 2011, slightly more than those in science and mathematics but less than those in engineering and in professional and pre-professional fields,” Vartan Gregorian writes in the Carnegie Reporter. “However, by their peak earning age of 56 to 60, these individuals earned $66,185, putting them about $2,000 ahead of professional and pre-professional majors in the same age bracket.“ “Further, employers want to...

The latest report from the US Census shows that median household incomes in America have declined by over 6% since the year 2000. In contrast, incomes for Washington, DC households have climbed by more than 23% over this same time span. Jason Furman, Chairman of the Council of Economic Advisers, hailed the report as “clear evidence that the Administration’s efforts to boost the economy are working. We have provided a pathway for those seeking to improve their lives. Joining the federal workforce or working for employers who are engaged intimately with the federal government—either as lobbyists for various programs or...

(MoneyWatch) Increasing housing prices and the stock market''s posting all-time highs haven't helped the plight most Americans. The average U.S. household has recovered only 45 percent of the wealth they lost during the recession, according to a report released yesterday from the Federal Reserve Bank of St. Louis.

Americans are a lot better at belt-tightening than the people they send to Washington. As Americans’ income fell by 3.6 percent in January, President Obama and Congressional leaders were warning of the dire consequences of sequester, the budgetary booby trap that forces cuts of as little as a third of that from the mammoth federal spending plan. Working stiffs sucked it up and absorbed the biggest monthly drop in income in 20 years, while the elected officials insisted that the federal budget had no fat to trim. Financial planning experts say if Americans can take such a big bite out...

Americans saw their income drop so dramatically in January that it marked the deepest one-month decline in 20 years. - Personal income decreased by $505.5 billion in January, or 3.6%, compared to December (on a seasonally adjusted and annualized basis). That's the most dramatic decline since January 1993, according to the Commerce Department. It's something of a combination of one-time events, though. Monthly income was unusually high in December because companies paid out early dividends to avoid upcoming tax hikes. Companies like Wal-Mart (WMT, Fortune 500), Oracle (ORCL, Fortune 500), and Costco Wholesale Corp paid special dividends to their shareholders...

Despite repeated promises that he would build prosperity from the bottom up, President Obama has presided over three years of income losses for the middle class, according to the latest household income data from the Census Bureau. Since 2009, the middle 20% of American households saw their average incomes drop 4%. In 2011 alone, they fell 1.7%. The poorest 20% have fared even worse under Obama, Census data show. Their incomes have dropped more than 7% since 2009, and are now lower than they've been at any time since 1985, after adjusting for inflation.

Despite repeated promises that he would build prosperity from the bottom up, President Obama has presided over three years of income losses for the middle class, according to the latest household income data from the Census Bureau. Since 2009, the middle 20% of American households saw their average incomes drop 4%. In 2011 alone, they fell 1.7%. The poorest 20% have fared even worse under Obama, Census data show. Their incomes have dropped more than 7% since 2009, and are now lower than they’ve been at any time since 1985, after adjusting for inflation.