Bob CollinsIs it possible in America for people to get ahead without someone falling back?
We’ll find out again Friday when the jobs report is released and if it shows that working people are making wage gains, expect the stock market to panic again.
There’s no bigger threat to monied interests than the little people getting a piece of the pie.
That’s basically what Credit Suisse told its clients in its latest market strategy report, according to CNBC.
“While the public debate has shifted to trade disputes, we believe this Friday’s Jobs Report will be more relevant … The market’s focus will be on Average Hourly Earnings,” strategist Jonathan Golub wrote in a note to clients Thursday titled “Wage Inflation, Not Tariffs, the Greatest Risk.” “History shows that accelerating wages tend to squeeze margins, spook the Fed, and precede recessions.”
Golub tamped things down a bit in his outlook.
“While not yet problematic, an overheating labor market poses the greatest threat to profit margins and could force the Fed to become more engaged,” he wrote. “While wage inflation has picked up, other indicators point to limited recessionary risk. As a result, we remain comfortable with our S&P 500 target of 3000, and a healthy continuation of the business cycle.”
Meanwhile, the Wall St. Journal has gotten a look at a report out today from the National Federation of Independent Businesses that says wages are going up for employees of small businesses because they can’t find enough workers.
That’s the way things are supposed to work and, in fact, since the Great Recession, as wages stagnated and Wall St. investors made a fortune, economists said that wages would eventually have to rise.
Now, they finally are.
There’s no reason to clutch the pearls, according to Seattle Times economic commentator Jon Talton.
Despite high productivity through most of those years, most workers saw few benefits in their paychecks. Policies to favor the wealthy investor class and large corporations have brought labor’s share of national wealth to the lowest level since modern records began in the late 1940s. This is true even in prosperous metros. For example, the average weekly wages for Seattle-Tacoma-Bellevue rose only $483 in real terms from 1990 to the second quarter of 2017.
Meanwhile, growth of the consumer price index remains below similar timeframes in recent expansions. Of course, this doesn’t guarantee a sure-footed central bank. But if the party ends, don’t blame workers.
