Over the past year, many pundits built theoretical models, using BLS "data" according to which the gradual rise in US wages and salaries was indicative of a slowly, if surely growing economy. And then, two days ago, all these models imploded in a supernova blast thanks to four years of government data revisions, which obliterated the "rising wage recovery" narrative with one spreadsheet.
We covered this yesterday in a post titled "BLS Just "Revised" Away Obama's "Fastest" Wage Growth Since The Crisis" in which we mocked the "stunning "accuracy" and "consistency" of economic propaganda data being reported by our government agencies" revealing how the Bureau of Labor Statistics yesterday reported a massive downward revision of the 1Q 2016 YoY real wage growth from +4.2% to -0.4% (a 4.6% swing). The bigger problem is that the revision also destroyed, or rather exposed, Obama's recovery fiction, as presented in a February 2016 press conference, in which he said the following:
Most importantly, this progress is finally starting to translate into bigger paychecks. Over the past six months, wages have grown at their fastest rate since the crisis. And the policies that I’ll push this year are designed to give workers even more leverage to earn raises and promotions."
Here is how Goldman - traditionally an economic cheerleader put it: "Following annual revisions to the US national accounts, some measures of household income appear much softer than they did previously." More:
For example, wages and salaries—a component of personal income—now shows slowing growth instead of steady gains. In addition, the August 9 productivity and costs report included a sharp downward revision to Q1 compensation per hour from +3.9% (qoq ar) to -0.8%.
And here is what America's "bigger paychecks" looks like before (dark blue line) and after (light blue) the striking revision.
But while the adjustments of BLS propaganda, or data, depending on one's political views, are to be expected - after all Obama would have no punchlines praising wage growth without the "pre-revised data", a far simpler confirmation of the slowing US consumer emerges when looking at the simplest of all indicators: government tax receipts, which are always unadjusted, and which show how much in taxes the government collects. The fewer the workers, or the more stagnant the wages, the less receipt growth there is. In fact, as we showed before, government receipt growth has never dropped at such a fast rate, without the US economy being, or promptly entering, into a recession.
Then again, the 2016 political election landscape, not to mention Hillary's polls, would look vastly different if the US government were to reveal the true state of the economy and prevent Obama from taking "wage growth" victory laps. We expect all that to happen shortly after November 8, as that is when the real deluge of data "revisions" is set to hit.