Booming: US Wages and Salaries Grow at Fastest Pace in Ten Years, Consumer Confidence Soars Again

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Posted: Oct 31, 2018 1:55 PM
Booming: US Wages and Salaries Grow at Fastest Pace in Ten Years, Consumer Confidence Soars Again

One of the economic metrics liberals have focused on during the Trump presidency has been wages.  Their argument has been that while other fundamental indicators are undeniably strong, America's growth is failing to help workers and families improve their own take-home pay.  This has been paraded as a failure of tax reform (more on that later), and an indictment of an otherwise-roaring economy.  With the midterms looming, it looks like the naysayers and nitpickers are going to have to smoke out a new pessimistic talking point -- via CNBC:

Wages and salaries rose 0.9 percent, well ahead of expectations for 0.5 percent. Benefit costs were up 0.4 percent. On a yearly basis, wages and salaries jumped 3.1 percent, the biggest increase in 10 years. Wage increases have been the missing link in the economy since the recovery began in mid-2008. Average hourly earnings have been rising steadily but have stayed below the 3 percent level as slack has remained in the labor market. However the unemployment rate is now at 3.7 percent, the lowest since 1969, and wage pressures have begun to build.

Here's a graph charting the comeback:


Also today, a fresh, closely-watched projection points to robust job creation numbers in October, soundly beating experts' expectations:

Companies continued to hire at a brisk pace in October, with private payrolls rising by a better-than-expected 227,000, according to a report Wednesday from ADP and Moody's Analytics. Economists surveyed by Refinitiv had expected growth of 189,000 after September's 218,000..."The job market bounced back strongly last month despite being hit by back-to-back hurricanes," Mark Zandi, chief economist at Moody's, said in a statement. "Testimonial to the robust employment picture is the broad-based gains in jobs across industries. The only blemish is the struggles small businesses are having filling open job positions."

The "only blemish" cited is the difficulty of some job creators to actually fill open positions, an indication of how hot the jobs market is.  Overall US unemployment is at 3.7 percent, the lowest mark in nearly 50 years, and third quarter GDP growth just came in at a faster-than-expected 3.5 percent, with the American economy apparently on pace to grow at a clip of at least three percent for the entirety of 2018.  No wonder US consumer confidence has peaked to an 18-year high:


A recent Fox News survey showed that tax reform is polling eight points above water -- far better than it fared when the bill was being debated and demagogued -- and an NBC poll gave Republicans a 15-point lead over Democrats on handling the economy.  But the opposition party has continued to blast away at the tax law, deliberately feeding widespread public perception that the new system helped very rich people and corporations, as opposed to the middle class.  Politico reported this morning about the misleading or outright false tax attacks Democrats are running against the GOP this cycle: "Republicans cut taxes for the vast majority of Americans, though you wouldn't know it by some of the campaign ads Democrats have been running," the story explains. "Some badly misrepresent the law, portraying it as a broad tax increase on the middle class."  

They're lying about tax reform in an effort to wrongly convince people that the new system doesn't benefit the overwhelming majority of taxpayers, which it empirically does.  As I wrote last week, Democrats' rhetoric on tax "fairness" is not rooted in fact, "the rich" already pay a massively disproportionate percentage of US income taxes, and the statistics on which many of the false criticisms rely are built upon a hypothetical future outcome, ignoring the law's impact over the next eight years.  Amazingly, nearly every House Democrat voted against a bill last month that would have made the new individual income rates permanent, thus vitiating two of their relentlessly-repeated talking points.  It seems they'd rather keep their mendacious claims intact than allow middle class families to keep their tax cuts indefinitely.  Interesting priorities.  As I leave you with this new development, please recall that every single Democratic member of Congress opposed this legislation, hoping to block the benefits American workers and consumers are now enjoying: