Red Flags Loom with Drop in Wages, Wage-Price Spiral, and Likely Recession
After what many analysts are referring to as the likely last good jobs report for the year, I issued the following statement:
February's jobs report is further proof that with emergency COVID jobless benefits ending, Americans are reconnecting to work.
But there are real red flags looming, including a large drop in real wages for workers, a wage-price spiral driving inflation higher, and a growing consensus among economists that a recession this year is more likely than not.
President Biden offered no real solutions to any of this in his State of the Union remarks. In fact, his obsession with Build Back Better -- which is dead -- will only make inflation worse and do little to stave off a crippling wage-price spiral.
The Labor Department's Bureau of Labor Statistics reported that February's unemployment report accelerated amidst rising prices and decreasing wages. Nonfarm payrolls for the month grew by 678,000 and the unemployment rate was 3.8 percent.