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Sunday, April 17, 2011

Numbers don't lie- Expenses & Wages

On Friday, April 15th, the Bureau of Labor Statistics had two Economic Releases.  The first was the Consumer Price Index Summary which basically gauges whether prices are rising or falling and by what percentage month to month, and on yearly average.  The second release was on Real Earnings i.e Salaries.

Let's take a look  (all quotations from www.bls.gov)

Under the Consumer Price Index Summary, it stated "The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5 percent in March on a seasonally adjusted basis."  And under Real Earnings, it stated "Real average hourly earnings for all employees declined by 0.6 percent from February to March".

~ Did you get that?

When you take the 0.5% increase in expenses with a decline of 0.6% in wages, that pretty much means it feels like a 1.1% increase to consumers-- in One month.

The BLS also stated, "The gasoline index posted its ninth consecutive increase and has now risen 14.4 percent over the last three months... The all items index rose 2.7 percent in the last 12 months, the largest increase since December 2009. The energy index has now risen 15.5 percent over the last 12 months, with the gasoline index up 27.5 percent. The food index has risen 2.9 percent with the food at home index up 3.6 percent."

Under Real Earnings, BLS stated, "Real average weekly earnings declined by 0.5 percent over the month... Real average hourly earnings fell by 1.0 percent, seasonally adjusted, from March 2010 to March 2011.   A 0.6 percent increase in average weekly hours combined with the decrease in real average hourly earnings resulted in a 0.4 percent decrease in real average weekly earnings during this period."

~ Are you seeing the pattern?

Increased food & gas.. Increased work hours.. Decreased wages..

And the politicians will still say 'Recovery' with straight face... And the media will tell you its your fault your life isn't better (see previous postings)

And one wonders- what will that proverbial 'last straw' be?

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