Stagflation rears its ugly head in US payroll data Employment growth constrained by rising wage costs driven by runaway inflation by David P. Goldman
https://asiatimes.com/2021/09/stagflation-rears-its-ugly-head-in-us-payroll-data/
Inflation in the US is turning into stagflation.US nonfarm payroll growth of 235,000 in August, the lowest in seven months, was constrained by rising wage costs.
Average hourly earnings rose by 0.6%, or 7.5% annualized. The most labor-intensive sectors turned in the worst monthly performance.
Leisure and hospitality jobs had risen by more than 800,000 during the preceding two months.
The chart of the day shows a clear inverse relationship between the rate of employment growth and the rate of change of average hourly earnings.
As labor becomes scarcer and more expensive, employers stop hiring, either because they can’t find workers or because they can’t afford them. This is a classic symptom of an inflationary cycle.
The average rent on a newly-signed lease is up 12% year-on-year as of August, according to Apartmentlist.com.
Home prices are up 20% year on year, the biggest jump on record, according to the Case-Shiller Index.
Used car prices are up 25%, and new car prices are probably up 10% after dealer discounts have dwindled.
Manufacturing jobs rose by 37,000, driven mainly by a 24,000 jump in automotive jobs.
But the Bureau of Labor Statistics’ survey of establishments was conducted in the middle of August before major auto companies announced production shutdowns to the global chip shortage.
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