MAGAnomics: Middle-Class Wage Rates Climbing as Expected, Wall Street Financial Media Not Happy…

For more than three decades all U.S. economic policy has been elevating Wall Street and diminishing Main Street. As a result blue-collar workers have not had wage gains keeping up with inflation for over 30 years…. Then came the era of Trump.

– “Walking in a Winner Wonderland” –

More than two years ago CTH began discussing the ramifications to a new emphasis on the economy outlined as a possibility of candidate Donald Trump’s economic policy outlook. Within the overall discussion we walked through the anticipated changes possible if A.) Trump won the election, and B.) Trump began instituting Main Street economic policy ahead of Wall Street policy (the past 30+ years).

We discussed the new dimension that would occur between two economic engines (Main Street -vs- Wall Street) as three decades of policy shifted. CTH outlined statistical and measurable KPI’s that would become visible in the space between the policy shifts.

Part of those discussions focused on energy costs, product costs (we explained how inflation would be weird), and importantly, wage rates. It takes several months of policy emphasis (actual outcomes), before the labor market wage rates would grow. We anticipated seeing that impact in Q2 of 2018, which is April-June 2018.  Well:

(Via CNBC) […] The Bureau of Labor Statistics reported that April closed with 6.7 million job openings. May ended with just over 6 million people the BLS classifies as unemployed, continuing a trend this year that has seen openings eclipse the labor pool for the first time. At some point that gap will have to close. Economists expect that employers are going to have to start doing more to entice workers, likely through pay raises, training and other incentives.

“Pressure is building for employers, and both hard data and anecdotal reports indicate that wage pressures are building,” Jim Baird, chief investment officer at Plante Moran Financial Advisors, said in a note. “With the economy still humming, employers are able to justify stronger wage increases to retain or attract talent, but it’s becoming a more challenging proposition.”

Most inflation measures are at 2 percent or more now, and are likely to continue rising. Companies are reporting record profits, but could find themselves constrained by a double-short of inflation, both from wages and rising costs due to escalating trade tensions and tariffs between the U.S. and its trading partners.

“How much might rising labor costs chew into corporate profits? How much will be passed through to customers in the form of higher prices? That remains to be seen,” Baird said. “Rising labor costs will boost take home pay, but we’re also all likely to see the effect in rising prices for goods and services.”

Those are all issues the Federal Reserve will have to weigh as well.  (read more)

What’s predictably fun to watch is how leading economists and national economic influence agents continue to be perplexed as we flow through the space between these two economic engines. Deep inside this new dimension, which will last for approximately 24 months, the control agents within the Fed cannot figure out why inflation remains low, yet the economy is heating up.

They really don’t get it.

They don’t get it because they have no reference points.

The economic models of the entire last generation+ are based on the assumptions of continuing globalist economics which advances, and has advanced, the interest of Wall Street over Main Street.  They were driving a “service-driven economy” message.

The investing class economy, ie. another name for a ‘service-driven economy’, has been the only source of historic reference for approximately three decades. These talking heads convinced themselves that a “service driven economy” was the ONLY economy ever possible for the U.S. in the future.

Back in January 2017 Deutsche Bank began thinking about it, applying new models, trying to conceptualize and quantify MAGAnomics, and trying to walk out the potential ramifications.  They began talking about Trump doubling the U.S. GDP growth rate when all U.S. investment groups couldn’t yet fathom the possibility.

It’s like waking up on Christmas morning every day to see the pontificating Fed struggling to quantify analysis of their surrounding reality based on flawed assumptions. They simply have no understanding of what happens within the new dimension.

Monetary policy, Fed control over the economy, is disconnected and will stay that way for approximately another 12-14 months, until Main Street regains full operational strength –and– economic parity is achieved.

As we have continued to share, CTH believes the paycheck-to-paycheck working middle-class are going to see a considerable rise in wages and standard of living.  How high can wages rise?… that depends on the pressure; and right now the pressure is massive.  I’m not going to dismiss the possibility we could see 10 to 20% increases in year-over-year wage growth in multiple economic sectors.

Winnamins.  We’ll need lots of them…

Forget minimum wage laws, they are inconsequential conversations when measured against the reality of how quickly wages rise in a free, fair, unregulated and growing economy.

Seriously, with full measure of optimism and appreciation – and tears of thankfulness that we are alive to experience it – these are exceptional times.

This entry was posted in Big Government, Big Stupid Government, Donald Trump, Economy, Election 2018, media bias, President Trump, Trade Deal, Uncategorized, Union Activity - ALL, US dept of agriculture, US Treasury, USA. Bookmark the permalink.

282 Responses to MAGAnomics: Middle-Class Wage Rates Climbing as Expected, Wall Street Financial Media Not Happy…

  1. Bendix says:

    When we recently got the government ordered minimum wage increase in New York State, what I noticed was a slowdown in service in the supermarkets, because they couldn’t pass along the cost to consumers, food is already as high as it can go.
    The poor clerks and cashiers who are now working twice as hard due to fewer workers scheduled, are also facing the ire of the customers, who hate the longer wait in line.
    Our dunce of a governor actually ordered a huge increase solely for fast food workers, because he had no idea that all other workers weren’t making well over 15 dollars an hour. Then he pretended that he actually was meaning to raise everybody’s wages.
    Anyway, wage increases have to be organic for them to do the good for the workers which they are meant to do.

    Liked by 1 person

  2. Deplore Able says:

    I am reflecting on this news and how PDJT has implemented policies to help the middle class. I flashed on a scene from the movie “It’s a Wonderful Life”, when George Bailey tells off Mr. Potter.

    “Just remember this, Mr. Potter, that this rabble you’re talking about, they do most of the working and paying and living and dying in this community. Well, is it too much to have them work and pay and live and die in a couple of decent rooms and a bath? Anyway, my father didn’t think so. People were human beings to him, but to you, a warped, frustrated old man, they’re cattle. Well, in my book he died a much richer man than you’ll ever be.”

    If the Republican Party becomes the party of the middle class, they will not lose many elections.

    Who are today’s warped frustrated old men who think of the middle class as cattle? You can find them in board rooms on Wall Street and the Chamber of Commerce.

    Liked by 1 person

  3. Jim says:

    Sundance, WHO ARE YOU??? It is a joy to read your articles and look forward to just how close you come to the truth. All I can say is “WOW”.

    Liked by 1 person

  4. It’s funny SD I’ve been thinking perhaps the greatest bait-and-switch bumper sticker of all Time; ‘relax, we’re moving to a service-based economy’ was Wall Street and the C of C’s treasonous mantra to prevent riots in the streets of Main Street America while they shipped our jobs away.

    Of course they were implicitly shipping away any chance of American primacy in the emergent goods-based technologies of the future. How long can a service-sector economy prosper without a strong industrial footprint? The plan was to equilibrate our prosperity away and have the see-saw meet in the middle, all on the road to a globalist flatland. Down we go. Up goes China.

    Clinton would have thrown up her hands and cited the inevitability of it all. America was being led into serfdom. I’m so proud of Trump and his team.

    Liked by 1 person

  5. Mike diamond says:

    Thank you Sundance for all you do to spread the Truth and expose the liberal lies!

    Liked by 1 person

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