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What Rising Wages: Fed Itself Just Admitted "Household Income Expectations Are Falling Sharply"
Having noted the plunge in consumer spending expectations to record lows last month, The Fed faces an even bigger problem this month. Despite the apparent wage growth in Friday's magical BLS data, The New York Fed admits "public expectations of future income took a big hit," as the index suffered its biggest one-month decline on record. But the news gets even worse, as 3-year-ahead inflation expectations plunged to record lows (confirming the record low inflation expectations from UMich's) and entirely discounting Stan Fischer's inflation excuses last week. Fianlly, as stocks have stagnated this year as wealth creator for The Fed, consumer expectations of housing price gains have tumbled to series lows. It appears a desperate-to-hike-rates fed is cornered by, as UMIch previously noted, "a disinflationary mindset is taking hold."
Triple whammy... Income - Down; Inflation - Down; Housing - Down...
According to a Survey of Consumer Expectations report Monday by the Federal Reserve Bank of New York said, one-year ahead expected inflation ticked up to 2.82% from 2.73% the prior month. But three-year ahead expected inflation ticked down to 2.78% from 2.84% in September, with October's reading resting at its lowest level in a survey that goes back to June 2013.
The bank also said the public's expectations of future income took a big hit. Median household income expectations fell to a 2.3% rise, from September's 2.8%. The New York Fed noted this was the biggest one-month drop in the history of the survey and that it was spread across demographic groups.
The findings on inflation expectations are unlikely to be welcomed by Fed officials as they contemplate raising short-term interest rates next month. Central bankers believe where the public believes inflation will be in the future strongly influences where actual price readings come in. The Fed has failed to meet its 2% price rise target for over three years, but officials have pointed to the relative stability of expectations to build confidence inflation will eventually rise back to desired levels.
Last week, New York Fed leader William Dudley noted that there is been a steady decline in inflation expectations in his bank's survey, and he said if expectations "move lower from here, that would increase our level of concern" about successfully getting inflation back to desired levels.
And finally, the oddly un-spun truthiness of The New York Fed...
CONSUMER SURVEY: Household income expectations fell sharply to 2.3% https://t.co/Vju3e5odh9
— New York Fed News (@NYFed_News) November 9, 2015
So the next time we hear from The Fed quoting "surely wages will grow soon," it is clear this is not the view of the average American, who, is supposedly responsible for the aggregate demand after all.
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"public expectations of future income took a big hit," as the index suffered its biggest one-month decline on record.
You ain't seen nothing yet
On a closely related note, Krugman is a piece of shit
Amerikansky experiment is interesting. Founding Father is demand transparency and accountability, so Amerikansky dialogue is full of extemporaneous language. Instead of talk only about vocation and where is next meal, American is talk about politic, economic, and many other thing. But, somewhere along way, convoluted dialogue of ecommunist and academic is permeate conversation and now dialogue is perversion with non-reality concept such as is "natural inflation", "deflation scare", "unemployment", "underemployment", "participation rate", and with straight face, ecoommunist and bankster is now discuss macronomic phenomenom such as "wage increase concern", "consumer spending", and "high evaluation of $USD", while Amerikansky for first time is now really start to worry, where is next meal.
Heaven is forbid failure of America because is beacon of last resort for rest of us!
We just need to find that shining city upon the hill
Silver is getting crushed! Thye have managed to kill this once thriving market, it's over for a long long long time. They won.
Back on sale in time for Christmas!
The days of self-loathing are over. I now choose to experience the euphoria of wealth accumulation by acquiring it at bargain basement prices, just like those thiev'in lizards at the top do.
It's all the matter of perspective. Keep on stack'in with both fists!
Yep, crude, rude and vulgar...and shiny. My only problem is waiting for delivery......
Doesn't my SNAP card count as free money?
Most of the American tech/engineering jobs are competing with people in India and elsewhere for lower wages.
Hey, American CEOs, who's going to pay higher prices for your more expensive products? Got that?
Used to be Americans but their broke now. Impoverish them further but eventually it will hit you.
Look at CAT. Many canaries in this coal mine.
Funny how Joe Six-Pack's got more clarity on what's going on than Mr. Yellen's squad.
It's gettin' real......real quick, it is.
This time seems to unraveling faster than 2007 / 8. The black swan that finaly tips it is goign to look more like a Turkey Vulture.
lowered inflation may be caused by a rising dollar which is bad for American exports.
But as America buys all their crap and doesn't produce it prices drop.
It will only take less then 6 months to see the dollar drop 30% and what will they say about inflation then? NOTHING!
Hey! I got an idea! Let's tighten monetary policy!
When Japan tried this, to 'signal' CB confidence, it lasted just 7 months and then they did a quick about-face. What's interesting is that they didn't try the consumption tax lunacy that Japan tried. But the tax increase gave BoJ something to blame for the 'unanticipated' weakness. The scripts get run and re-run. Sort of like bad television.
Somebody spark a match, let this mutha burn.
Gotta let it soak in gasoline a little longer......
And on data like this, they will raise rates in December.
NOT.
Oblameo joins Fakebook to tell you why serf incomes don't matter ..... global warming is your # 1 problem
http://thehill.com/policy/technology/259545-obama-joins-facebook-makes-climate-change-appeal
Rust belt syndrome.Being infected by Detroit and Cleveland and of course NeoCon philosophy.Those Neo-Nazis running Washington and who are also members in the KKK will bankrupt America with the help of bankers and the Fed.Help.they sold out America to Commies.
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"a disinflationary mindset is taking hold."
There is nothing taking hold. It has been in existance for some time already. Disinflation goes back to the early 1980's, when it started.
Deflation follows disinflation, as the cycle passes 180 degrees.
Deflation?!?!? You are a fucking idiot. Compared to the 80's and the purchasing power of wages/incomes today, I don't see any "deflation" in anything required for a high standard of living.
Deflation is there, it has been simply deferred though debt in the tens of trillions (I can't keep up with the latest estimates).
I think the new term is deflationary expansion. Assets deflate while goods inflate. What will they think of next?
"Survey of Consumer Expectations"
This is some quant equivalent of gypsy palm reading—except that the magical process involves guessing on the part of statistical "consumers".The value is the same but I still prefer the gypsy method as having more style and connection to reality.
Why are they positive at all? The data for the 99% have been declining for 30 years, more sharply recently.
I'm not even sure that starting a new world war will get us out of this financial crunch.
All items.................. .0
Food...................... 1.6
Food at home............. .8
Food away from home (1).. 2.9
Energy.................... -18.4
Energy commodities....... -29.5
Gasoline (all types).... -29.6
Fuel oil (1)............ -34.9
Energy services.......... -3.0
Electricity............. -.4
Utility (piped) gas
service.............. -12.1
All items less food and
energy................. 1.9
Commodities less food and
energy commodities.... -.5
New vehicles............ .5
Used cars and trucks.... -1.7
Apparel................. -1.4
Medical care commodities 2.7
Services less energy
services.............. 2.7
Shelter................. 3.2
Transportation services 2.2
Medical care services... 2.4
consumers don't expect inflation? look carefully at this chart then put a hand over one eye and read everything other than energy. energy prices have dropped in the last year. are they going to drop again? will they continue to drop? natural gas has taken a beating. what happens when the Fed raises rates and kills the spec trade, (NG is not just an industrial indicator, residents need it, especially now that global warming makes the summers nine months long) the hedge funds who are using zero interest money to frack? there is so much malinvestment in the energy sector it has driven supply and the expectation for supply out of hand, but guess what, Chevron is actually increasing development. why?
turn those energy minus signs to plus and now what does this chart look like? NIRP is going to be a giant head fake. HYPERINFLATION is going to pop like a drive-in movie blow job. sure household incomes are falling, inflation is rising. even food is nearly at the Feds 2% target. and its going to hurt when nominal rates trail inflation, at least realitively, say 3% to 1 1/2% for instance, but let those numbers get big, 5% inflation to 2 1/2% rates and then the public anger gets raised. (same percent markdown in rates either way) bon apetite
I keep asking this question but never get an answer. How can we possibly have hyperinflation when the average person has so little currency?
Easy, loss of faith in Central Banks, The FED, coupled with dollars coming home from former hoarders of dollars, including China, Russia and others. Doesn't matter how much / little the retards here in Merica have. When the dollars time is over, it's over.
Right, but when the dollars come home, how do people get their hands on them? What was it, 60% of American households have less than $1,000 in savings and 25% have none? So when the best response to rapidly rising prices becomes panic buying, what are Americans gonna buy with? Also can't the Fed just raise rates through the roof at that point? It does seem the dollar can't last, I'm just trying to figure out the mechanism. Maybe a big deflation needs to come first?
its not going to be a demand push inflation. costs and margins with low demand will reduce supply, and keep prices up. prices rise but people do without/less companies need to increase profits, and raise prices, lower quantity. food and energy are inelastic demand. items needed with credit, like autos and homes will come down a lot, but day to day will squeeze everyone a bit. it an INflationary mindset takes hold in these areas, THEN people start hoarding foodstuffs.
massive delfation in real assets, leads to restriction of supply leads to higher prices and scarcity....expensive food and rent; cheap suburbans and watercraft. mix in rising rates (rising floating rates 'b/c someday dammit were raising rates!) and an inverting yeild curve, stagflation. supply side econ may come in along with debt jubilee/helicopter money, or just a hot war. similar to 1930's...the farmland was already in a dustbowl...farm loans/banks all going under prior to the 1929 mkt crash....this time its energy AND commodities on the slow fuse.....first a little then all at once.---thats why econ data sux at predicting recessions and bear mkts....linear thinking in a geometric mkt
"food and energy are inelastic demand."
a few years ago I stopped drinking coffee and eating cookies etc. At the end of the month my AMEX bill was less than a half of what I used to spend before
I didn't even try hard - moral of the story there is a lot of scope to save money if you improve your diet (by getting rid of sugar, coffee and other drugs)
Regarding energy - I noticed last winter (when I was in Greece) that most people converted to using fireplaces (modernized so they blow hot air in a few rooms - it's Italian technology) instead of oil. Wood costs about a half of waht oil did (and they use hardwood bits from Olive trees. Those trees need to be trimmed heavily every 2 years I think). These are considerable saving (50%). If you have your own olive trees (as most Greeks do) you can save even more
Also a few months ago one of my cousins (in Serbia) designed and made a furnance which uses soy stems and leaves (whatever is left from the plant after beans are picked). Since he produces soy anyway - he gets these bales for free so his heating expenses are now zero). Soy straw is apparently greasy and burns very well
There is a lot of scope to spend less on both energy and food it seems
the coming hyperinflation may well be caused by the rejection of the USD$ by it's trading partners & the rest of the world, thus the amount of currency held by US citizens would be a moot point.
if the rest of the world comes to reject the USD$ (this trend is already well-established & documented), then it's value plummets regardless of how much cash is held by US citizens or whether US citizens have 'faith' in their currency. The US no longer produces enough tangible/trade goods to 'export' inflation... quite the opposite - the US is cornered in a position wherein inflation can only be imported from abroad.
each new bi-lateral trade deal made b/t non-US trade partners specifically EXCLUDES the USD$... and when enough global trade is conducted w/o the USD$, it's value will crash as the oceans of USD$ reserves held abroad will have no practical purpose & no destination. the once vast demand for USD$ as a trade/reserve currency is steadily diminishing, and some day soon the scales will tip and ever more dollars will be demanded in return for all the goods & services we once produced but now import. thus americans will have to pay ever-increasing amounts of dollars to import their consumer junk. US fed/banks will be forced to release the mountains of USD$ reserves that they've accumulated via QE/ZIRP simply to facilitate our consumer economy which is saturated by imports that will cost more & more in USD$ terms.
as to the question of "how" americans will get their hands on the USD$ currently hoarded by the banks, it's hardly a mystery... it will occur via "helicopter" money drops as described many times by Greenspan/Bernanke... they'll simply mail checks/EBT cards to everyone, likely under the guise of a 'tax rebate' or some such. only afterwards will most folks realize that they have been willlful participants in government-sponsored hyperinflation.
I still don't know, I was reading about Weimar and they said Germans were hoarding cash prior to hyperinflation. Helicopter money, sounds interesting... let's see, we're at $4.5T for QE? How much would that be in helicopter money for every man, woman, and child? If their goal is 2% inflation, seems like a good way to get it...
The ever expanding credit bubble and the ongoing printing of money will eventually lead to other countries no longer seeing any value in the dollar - their prices will increase accordingly. Since this country produces less and less, we are prisoners to imports.
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Great stats, but post a link to the stats, so schmucks like me can clip it!
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V-V
Contrast Fed's admission w/ Krugman's fantasy world/recovery... is it any wonder that neither the Fed nor Krugman have any credibility?
I think the increase in health care costs will put a damper on this Christmas.
Consumer spending seems to be what the politicians are counting on to save the country - good luck with that.
http://www.huffingtonpost.com/2012/08/15/unicor-prison-labor_n_1778765.html
Let's ask the Bush family what their Unicor business is doing for jobs. $900 million in revenue in 2012 for prison labor at less than $1 an hour is sucking the life out of manufacturing in the "Made in the USA" sector.
exactly what I woudl expect from them - thir only innovation is to do with new ways to enslave people