Here is the Hedgeye Tweet behind this post.

Let's dive further into McCullough's idea with some more details.

Employment Cost Index: All Civilian, Manufacturing, Accommodations and Food Service

Image placeholder title

RECOMMENDED ARTICLES

Employment Cost Index Details

  1. All Civilian Wages: 3.08%
  2. All Civilian Total Benefits: 2.75%
  3. Food Service Wages: 4.36%
  4. Food Service Total Compensation: 3.89%
  5. Manufacturing Wages: 2.78%
  6. Manufacturing Total Compensation: 2.09%

Comments

  • Food service and accommodation (think fast food restaurants) are the relative leader in employments costs. Expect to pay more for less, especially if you eat at fast food places.
  • Manufacturing is a relative drag on the rising ECI.
  • The numbers above are averages. That's not the best way of looking at things. Median numbers tell a much better story but those reports lag by almost two years.
  • In all cases above, wages are rising faster than total benefits. This is likely worse than it seems.

Don't fool yourselves.

These jumps are not keeping up with inflation for those paying their own medical insurance, for those wanting to buy a house, and for those in school.

Mike "Mish" Shedlock

Wages and benefits Surged 0.8 Percent in the First Quarter, Most in a Decade

Employment costs are on the rise. Wages rose 0.9% and benefits rose 0.7% in the first quarter.

Imaginary Wage-Inflation Conundrum

Economists are puzzled over the wage growth conundrum. Wages were supposed to rise significantly. They didn't. Why?

Pre-Tax Corporate Profits Rise 0.2%, After-Tax Corporate Profits Rise 6.7%

The Trump Tax cuts strongly came into play in today's GDP update which includes corporate profits.

Productivity Dives, Wages Rise; Inflation Theory vs. Practice; Technical Recession?

Today’s BLS release on Productivity and Costs shows a back-to-back decline in productivity accompanied with rising wages. Productivity is up year-over year, but barely, at 0.6%.

Job Growth +224,000 Tops Expectations, Wage Growth Disappoints

Jobs growth beat expectations of 165,000 but wage growth underperformed, rising 0.2% vs an expected 0.3%.

Jobs Report: Payroll Miss +164K, Nonfarm Wage Growth Anemic +0.1%

The BLS reports April jobs as +164K with the unemployment rate falling to 3.9%. Revisions were positive, wages anemic.

No Improvement in Corporate Profits Since 2012

The BEA tells us today that Corporate Profits are down 1.1% from a year ago. Profits are below a level reached in 2012.

Despite 213K Jobs Gain, Unemployment Up by 499K: Wage Growth Anemic Again

The labor force expanded by 601K sending the unemployment rate up to 4.0% from 3.8%. Wage Growth missed expectations.

CPI Benign but Medical Services and Rent Squeeze Continues

Consumer prices were flat in September and core CPI rose less than expected. Housing and medical services are problems.