While the September Employment Situation Report glossed over and propagandized a lot of the inner details of the September jobs data, there is one point that it simply ignored altogether: the impact of inflation on average earnings.
In September, average hourly earnings for all employees on private nonfarm payrolls rose by10 cents, or 0.3 percent, to $32.46. Over the past 12 months, average hourly earnings have increased by 5.0 percent.
Workers will not see one single penny of increased purchasing power as a result of these nominal earnings increases. The consumer price inflation that the Fed has been failing to contain all year long has already made certain of that.
When you overlay the rising interest rates against the year on year percent changes in both inflation and hourly earnings, the argument that interest rates are combatting inflation gets highly suspect quite quickly.
Regardless of prevailing wisdom or the Federal Reserve’s logic on interest rates, at the present time the reality remains that the rate hikes have yet to show the desired effect on inflation—and workers are paying the price.
They haven’t raised them enough and they sat on their hands while we entered a recession. The fed is a one trick piney but Biden has assigned them more duties. Those duties now have to be implemented, FedNow and their fancy tracking devices, FedCoin.