U.S. economy grows at 4.8% Q-Q annualized rate

[Kidlicious]

Originally posted by pchang
Consumer income increased by 0.8%. Consumer spending index increased by 0.4% during the same time period. Core inflation was 0.3% during the same period.

Wage costs went up too. The job market is good so Americans are spending money like it's going to stay good. They aren't worried too much about high gas prices. However, the gas prices will probably stay high for a long time, and the job market will slow down. It's just a matter of time. The long run trend is not for wages to increase, they only do so for short periods at time.

[pchang]

wage cost = consumer income for the most part

[Dinner]

So what factor has foreign competition and illegal immigration had on the lack of wage growth for US workers? Does anyone know?

[Colon™]

No. Firstly, $51.6 billion of the $88.8 billion increase in personal income was from transfers, more specifically a hike in medicare payouts. Only 34$ billion were from increases in employment compensation, which is about the average increase the previous 7 months. No acceleration of absolute wage growth.

http://bea.gov/bea/newsrel/pinewsrelease.htm

Secondly, it turns out the increase in medicare payments was overstated by $39.8 billion (it was supposed to have been recorded in April). Hence, the personal income increase in March has been degraded to $49.9 billion, which is lower than the $52.7 billion increase in personal outlays.

http://www.bea.gov/bea/dn/pi0306errata.htm

Presumably, the personal income increase will outpace personal outlays in April, but whether that'll be because of an acceleration in wage growth will remained to be seen.

[edit] that was meant as a reply to pchang

[Saras]

working stiffs not getting raises is bcs low paying jobs are the ones first taken by immigrants. Imagine how this "low wage" looks in terms of % increase from mexican, polish or ukrainian salaries. US has thus effectively lifted millions out of poverty. Don't be so selfish, commies

[Kidlicious]

Originally posted by pchang
wage cost = consumer income for the most part

If that's a response to what I said. I'm not sure what it means. There's a relationship there, but what is important is consumer spending since that leads everything. If people adjust expectations for wage increases and expect gas prices to stay high then they will probably start spending less and that will affect income.

[Vanguard]

Except that we really don't have to reduce our debt, and we shouldn't if it's going to reduce growth. All we really have to worry about is interest rates getting to high again, so eventually the deficit could be a problem. Surpluses serve no real purpose though.

It reduces growth one way or the other. Either we have to repay it by, say, raising taxes, or the resulting inflation will result in the need for higher interest rates---- which will hurt growth.

Not raising taxes does not eliminate the hit to future growth caused by debts. It just hides it. And distributes it very badly.

[Kidlicious]

Originally posted by Vanguard
or the resulting inflation will result in the need for higher interest rates---- which will hurt growth.

It does not cause inflation.

[Vanguard]

Well, as I said, it may or may not result in inflation depending on the Fed's counter moves (as well as those of other central banks).

But borrowing does not create wealth. If the Federal government is borrowing to spend money on things that will not result in more growth (such as tax cuts for the rich or pointless wars), then it is destroying wealth. One way or another, this will hurt growth.

[Kidlicious]

Originally posted by Vanguard
Well, as I said, it may or may not result in inflation depending on the Fed's counter moves (as well as those of other central banks).

Deficits can be inflationary, but the debt is not.

[Lawrence of Arabia]

Surpluses serve no real purpose though.

except they help reduce the current account deficit, and increase national saving, which means more growth tomorrow.

[Kidlicious]

Originally posted by Lawrence of Arabia

Surpluses serve no real purpose though.

except they help reduce the current account deficit, and increase national saving, which means more growth tomorrow.

Considering that taxes have to be collected to do both of those things they probably don't create any growth.

[Ted Striker]

Originally posted by Saras
working stiffs not getting raises is bcs low paying jobs are the ones first taken by immigrants. Imagine how this "low wage" looks in terms of % increase from mexican, polish or ukrainian salaries. US has thus effectively lifted millions out of poverty. Don't be so selfish, commies

Not really.


So rich are getting richer

Now then according to your theory the poor were poor to begin with but now slightly richer since they had low expectations.

This leaves out the other 60% of society which makes up the middle class and the backbone of any healthy nation

Oh wait, they don't matter because the middle class is effectivley dying and becoming working poor.

Sweet deal

**** the good times

[Lawrence of Arabia]

DONT YA KNOW TED? THE RISING TIDE LIFTS ALL YACHTS!!!!!!!!!!!!!!

[Whoha]

Originally posted by Oerdin
So what factor has foreign competition and illegal immigration had on the lack of wage growth for US workers? Does anyone know?

What other causes are there? Eliminating worker bargaining power and introducing a glut of labor have been terrific for those guys at the top.