Casey Harper (Central Plaza)
New jobs data showed that a significant number of Americans saw their incomes shrink last month even as prices continued to rise.
Morning Consultation Releases New Economy data Americans reporting lost wages or income rose from 11% to 11.7% in July.
“The U.S. labor market remains strong, but the best days may now be behind us,” said John Leer, chief economist at Morning Consult. “Companies are slowing hiring and expansion plans as the Fed aggressively raises interest rates in response to high inflation. Unleash momentum from a red-hot labor market.
“Whether this slowdown is rapid and severe enough to tip the economy into recession remains to be seen,” Leer added.
Poorer Americans have been hit hard.
“For the week ended July 23, 13.9 percent of adults with household incomes below $50,000 reported losing wages last week, up 1.3 percentage points from a series of lows in early June,” Morning Consult said. “Wage losses are also concentrated in certain areas, including leisure [and] Hospitality and architecture. “
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The drop in wages is untimely as the latest inflation figures show prices continue to rise.
The latest inflation data from the U.S. Bureau of Labor Statistics showed that consumer prices rose 9.1%, beating expectations, suggesting price increases are not slowing.
The U.S. Bureau of Economic Analysis released its personal consumption expenditures, a key indicator of inflation, last week, and prices also rose markedly, especially in food and energy costs.
“Food prices rose 11.2 percent and energy prices rose 43.5 percent,” BEA said. “Excluding food and energy, the PCE price index was up 4.8% from a year ago.”
Morning Consult conducts 20,000 weekly interviews to collect data for July.
Co-issued with permission from Central Plaza.
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