CNBC is noticing the upward wage pressure is focused heavily on the middle-class workers and lower end of the labor market; another KPI (Key Performance Indicator) the economy is stronger than most financial pundits are admitting:
CNBC – The recent jump in paychecks has come with an unusual characteristic, as workers at the lower end of the pay scale are getting the greater benefit.
Average hourly earnings rose 3.4 percent in February from the same period a year ago, according to a Bureau of Labor Statistics report last week. That’s the biggest gain since April 2009 and seventh month in a row that compensation has been 3 percent or better.
What has set this rise apart is that it’s the first time during an economic recovery that began in mid-2009 that the bottom half of earners are benefiting more than the top half — in fact, about twice as much, according to calculations by Goldman Sachs. The trend began in 2018 and has continued into this year, and could be signaling a stronger economy than many experts think. (cont.)
[I’ve got to laugh a little bit: “the trend began in 2018“… well, um, Duh]
We already pointed out the specific nature of this wage increase [SEE HERE] along with the dive into the rate of inflation, so we won’t duplicate the explanation again. However, the basic backstory is how Trump’s MAGAnomic (Main Street) policies focus on, and deliver, greatest benefit to blue-collar workers. This is the exact opposite of the trend created by politicians selling Wall Street policy over the past 30 years.
The JOLTS report surfaced two days later and highlights the number of job openings continues to exceed the currently estimated unemployed workforce by approximately one million available jobs.
(BLS) Large numbers of hires and separations occur every month throughout the business cycle. Net employment change results from the relationship between hires and separations. When the number of hires exceeds the number of separations, employment rises, even if the hires level is steady or declining. Conversely, when the number of hires is less than the number of separations, employment declines, even if the hires level is steady or rising.
Over the 12 months ending in January, hires totaled 69.2 million and separations totaled 66.3 million, yielding a net employment gain of 2.8 million. These totals include workers who may have been hired and separated more than once during the year. (link)
So we’ve added more than 2.8 million jobs in the last year. Let that settle in for a moment. That’s a consistent run of over 220,000 jobs/per month each month of the year.
Digging a little deeper into BLS Table-1 you might notice something interesting that also aligns with the basic elements of POTUS Trump’s MAGAnomic intent:
First, available job openings in Durable Good Manufacturing in January 2018 were 261,000 it’s now 305,000. So there’s 44,000 more durable good manufacturing jobs available now than a year ago; again evidence this sector is continuing to expand at a rate higher than the available workforce to fill the jobs.
Second, [also Table-1] looking at all job sectors. While the job growth is regionally strong overall, there’s more job growth available in the South (+500k) and Mid-west (+212k), than in the North-east (+143k) and West (+91k).
Now, doesn’t that exactly match with the MAGAnomic intent of the 2016 election focus?
This stuff doesn’t happen automatically, what we are seeing here is direct and specific evidence of Trump-directed economic policy (his magic wand) landing exactly in the places candidate Trump, president-elect Trump, and now President Trump said they would land.
- All wages are growing, but wages are rising faster for Blue-Collar workers and the middle-class.
- More jobs are available in just about every sector, but highest job growth is in higher wage durable good manufacturing.
- More jobs are available throughout the country, but available job growth is highest in South and Mid-West.
Overall the total U.S. economy looks excellent; healthy and strong. However, what looks especially excellent is the targeted success of Trump’s policies directly into the heart of the Main Street economy where success lasts the longest.