The Federal Reserve utters platitudes about moderate growth in the economy while media pundits talk about the improving labor market.
The “raw” average wage, computed as net compensation divided by the number of wage earners, is $6,704,657,596,370.41 divided by 155,772,341, or $43,041.39. Based on data in the table below, about 66.9 percent of wage earners had net compensation less than or equal to the $43,041.39 raw average wage. By definition, 50 percent of wage earners had net compensation less than or equal to the median wage, which is estimated to be $28,031.02 for 2013.
As you can see, the U3 (full-time) and U6 unemployment (full-time and marginally attached workers) does NOT reflect a “back to normal” labor market. In addition, mortgage purchase applications and M2 Money Velocity continue to fall/stagnate.
Bear in mind that it has been more than 5 years since the NBER declared that the recession ended.
Is it any wonder that the fastest growing credit in the US is student and auto loans?
Particularly “subprime” auto loans.
But at least Federal Reserve policies are helping to push asset prices up again … for those who actually own assets like stocks, housing, commercial real estate, etc. Just not wages and real income.
From Jesse’s Cafe Americain.