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Zandi's "Workforce Vitality Index" Suggests Fed Should Hike Rates Sooner

Tyler Durden's picture




 

If you like your 'disappointing' government-sponsored wage growth data, you can keep it... but if you are an ambitious talking-head economist looking to boost confidence in the economy in the hopes of a career in the administration, then ADP has just the 'tool' for you. Behold, the "ADP Workforce Vitality Index" - which measures the total real wages paid to the US private sector workforce, implying that the BLS is not measuring wage growth correctly as it is actually notably higher. In Q3, the ADP data grew 0.77% which they argue "is a good sign that may lead to increased consumer spending and a boost for the economy," and implicitly means The Fed should be hiking rates sooner as ADP warns "real wages are accelerating." Zandi the optimistic hawk?

 

Infographic: ADP Workforce Vitality Index Shows Real Wages Accelerating

 

 

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Thus - Fed narrative confirmed: wage growth is accelerating and this is justy the excuse The Fed needs to exit QE and start tightening policy... because they know just how impotent they will be if another recession or slowdown or market crash occurs with rates at zero and markets more dovishly positioned than actual policy.

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In conclusion, just as the PMIs are used and abused to fit whatever narrative is necessary to maintain the status quo of easy monetary policy OR "tighter policy because the economy is rebounding so well", we suspect ADP's efforts here are more of the same... given enough economic indicators, even a monkey can find reasons to be dovish forever or hawkish right now.

 

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Wed, 10/08/2014 - 13:41 | 5304218 Spungo
Spungo's picture

That graphic says about 1/3 of Americans make less than 20k.
http://likethedew.com/wp-content/uploads/2010/08/MissionAccomplished_Oba...

(that saying will probably be used for the next 50 years, just like everything is "-gate" after watergate)

Wed, 10/08/2014 - 13:46 | 5304233 Stackers
Stackers's picture

Someone needs to let my boss know wages are rising .........

Wed, 10/08/2014 - 13:56 | 5304278 pods
pods's picture

Speaking of wages, Jennifer Lawrence is all pissed off that so many guys were beatin off to her without paying first.

She called it a sexual violation.  I think it is more about haggling about price myself.

Sorry, just not fixated on her enough to subject myself to the Hunger Games..............

pods

Wed, 10/08/2014 - 13:57 | 5304282 insanelysane
insanelysane's picture

Fucking ADP, and they know better because they do my payroll which has had yearly increases of 2% for the last 5 years.

Wed, 10/08/2014 - 13:48 | 5304242 Pool Shark
Pool Shark's picture

 

 

Message to the fed:

"Go ahead; raise rates. I triple-dare-ya!"

 

Ain't gonna happen...

 

Wed, 10/08/2014 - 13:44 | 5304227 Unknown Poster
Unknown Poster's picture

The recovery party is getting out of hand, pull the punchbowl.

Wed, 10/08/2014 - 13:45 | 5304234 carbonmutant
carbonmutant's picture

Zandi sounds like a troublemaker...

Wed, 10/08/2014 - 13:48 | 5304241 vote_libertaria...
vote_libertarian_party's picture

" ...they know just how impotent they will be if another recession or slowdown or market crash occurs with..."

 

 

Are you every REALLY impotent if you can write your own rules and print unlimited amounts of money?

Wed, 10/08/2014 - 13:50 | 5304254 Pool Shark
Pool Shark's picture

 

 

"Are you every REALLY impotent if you can write your own rules and print unlimited amounts of money?"

 

Yes. The last 5 years have proven it.

Despite everything the fed has thrown at it, the economy has not actually improved.

 

Wed, 10/08/2014 - 13:48 | 5304247 Toyota echo
Toyota echo's picture

In 1964 minimum wage was 1.25 = 5 silver quarters or about 20.00 in today's money.
7.25-20.00= 12.75 of lost wages?

Wed, 10/08/2014 - 14:08 | 5304312 Pool Shark
Pool Shark's picture

 

 

Also, the national average gasoline price in 1964 was $0.30 a gallon. That's 1-1/5 silver quarters.

Today, the silver in those coins (even at currently-depressed levels) is worth $3.71:

http://www.coinflation.com/

So, gasoline is priced pretty close to where it was 50 years ago.

But, in 1964, minimum wage bought you over 4 gallons of gas; while today it doesn't even buy you 2...

 

Wed, 10/08/2014 - 13:50 | 5304249 Dr. Engali
Dr. Engali's picture

If the fed starts raising rates they won't need to be worried about  responding if the market crashes because they will have caused it. Wake me when Germany and Japan's rates start to rise.

Wed, 10/08/2014 - 13:51 | 5304262 Bell's 2 hearted
Bell's 2 hearted's picture

The Fed should be hiking rates sooner as ADP warns "real wages are accelerating."

 

business margins are being squeezed here and now (see just about any corp involving consumer spending ... walmart, mcdonalds, etc)

 

real wages accelerating is a myth

 

 

Wed, 10/08/2014 - 13:53 | 5304264 Bell's 2 hearted
Bell's 2 hearted's picture

zandi a noted flak for The Administration

Wed, 10/08/2014 - 13:55 | 5304271 vote_libertaria...
vote_libertarian_party's picture

Is he saying wages are up an AVERAGE of 10.6% (110.6) in three years?

 

I'd like to check his homework...

Wed, 10/08/2014 - 13:59 | 5304288 I Write Code
I Write Code's picture

Um, does he even attempt to subtract off for inflation?

Looks to me like he does not, and so the reality is people are losing high-paying jobs and being pushed into low-paying jobs, and Zandi thinks this is great.

It's all a dead cat bounce since 2008.

And it won't get any better until we bring back 10,000,000 jobs from China.

Wed, 10/08/2014 - 14:01 | 5304291 ThroxxOfVron
ThroxxOfVron's picture

Zandi is talking his own book and counting his own take.

Another bullshitter carrying water for the staus quo PTB and living off the skim.

Wed, 10/08/2014 - 14:08 | 5304326 TeresaE
TeresaE's picture

Does ADP count employer-paid health insurance as "gross wages" like the BLS does?

I bet they do.

Thanks to our canceled, criminalized, insurance policy (which worked great for our workers), our workers all have seen a growth in "wages."

Our premiums went up 70% (while our deductibles TRIPLED), so according to the BLS, so did the employees wages.

Problem is my employees pick up 20% of premiums, so take home went down and their out of pocket is HUGE.

"If you like your health insurance you can keep it*."

*if you get free stuff or are a unionized, government connected, employee, apparently does not apply to those of us that actually pay for it.

The wheels on this bus are flying off.   ADP unicorn reports to the contrary.

Wed, 10/08/2014 - 14:23 | 5304384 Ghostdog
Ghostdog's picture

Is this the same Zandi as the cocksucking, shit stained dildo licking, cum wadded face fucked, Yellen penis evnied, small asian boy pee pee whacking pederast? That one?

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