U.S. inflation hit a six-year high last month delineating the reason workers are not feeling real increases in their wages. Americans are finding it difficult to realize real increases in their take-home pay despite an economy that is growing at near-record levels.
The consumer-price index, a measure that tracks prices of a basket of consumer goods and services – everything from cereal to furniture to clothing – rose 0.1% in June. Core prices, the consumer price index less food and energy goods, which are known to fluctuate wildly, increased 0.2%.
June marked the second consecutive month in which annual inflation, which reached 2.9% last month, offset the gains made in the average hourly wage. That means wages have remained stagnant despite the fact that unemployment is at the lowest point it’s been in nearly two decades and the number of job openings in the country is now greater than the number of jobless Americans.
The U.S. economy added 213,000 jobs in June. Construction jobs added 13,000 jobs in the month, health care added 25,000 and professional and businesses services, leading all other industries, added 50,000 new positions. Even manufacturing, seemingly unbothered by the bourgeoning trade war between the U.S. and other countries, added a robust 36,000 jobs.
The unemployment rate ticked up to 4% from 3.8%, marking the first time that measure has increased in one and a half years, but even that news was viewed as a positive. About 601,000 Americans have re-joined the workforce, which is what caused the rate to drop. The market is so strong, many people who had previously given up looking for work have started again.
June marks the 93rd straight month of positive job growth in the U.S. and the current economic expansion is the second longest in the nation’s history. The U.S. will achieve the largest expansion in its history if it can keep the current pace steady until July of 2019.
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