Congratulations Workers: You Make 0.3% More Per Hour Than One Year Ago

In real terms, workers make 0.3% more per hour than a year ago, assuming one believes the BLS CPI Statistics.

Once again, we can trace this back to Nixon Shock.

Real Compensation Per Hour

Trade Imbalance

Median Home Prices

Real GDP vs Total Credit Market Debt

The Fed discontinued the total credit market series in the fourth quarter of 2017.

Total; credit market debt was roughly $1.7 trillion when Nixon closed the gold window. At last report it was $68.6 trillion.

It takes massive amounts of increasing credit to produce relatively trivial increases in GDP.

Gold vs Faith in Central Banks

Everything Under Control?

If you don't think so, buy gold.

Mike "Mish" Shedlock

Fortunately inflation is less than 0.3% per year, so these workers are actually coming out ahead.

Did that sound convincing? Do I get a job as a Fed governor now? The real world's a tough place, I could use a few years chilling in the grandest Ivory Tower of all.

You, my son, did not study arithmetic enough. It is real compensation that increased 0.4%, not nominal compensation. Real means "already adjusted for inflation". Nominal means "as written on paper".

Buy gold!

You caught me, posted too fast and misread. Not changing the sentiment, though, as Mish noted the "assuming one believes the BLS CPI Statistics" disclaimer above. I sure don't believe them.

Maybe it was a Freudian slip! Deep down I knew I had to be really wrong to be considered for any Fed appointments.

Nixon didn't have a choice. The US reached peak oil production in the US in 1971 and knew it was going to have to start importing massive amounts of oil in the decade ahead. And the US did not have enough gold reserves to pay for the oil. The choice was either to dump the gold window then and maintain the reserves, lose the reserves altogether as the gold was redeemed for oil imports, or price oil at a point that minimized its use and imports. Option 3 would have crushed not just the economy, but what people had come to believe America was all about. Nixon did the right thing.

Wages up .3%, but labor costs up 2.9%? Those stats seem to contradict each other.