March Stagflation Index Turns Positive
(Click on graph for larger image)
The March Stagflation Index (SFI) rose as wage gains outpaced the change in cost of living, which actually fell slightly. This bit of good news ended two months of rising prices and slower wage growth.
The March data from the Bureau of Labor Statistics indicates that wages rose faster than inflation for non-managerial workers in the private sector, who make up about 80% of the American workforce. The key data:
Consumer Price Index (CPI) -0.1%
Average Hourly Earnings (AHE) +$0.04 or +0.22%
Average Hourly Wage $18.50/hour
Calculating the March percent increase in wages adjusted for inflation:
AHE – CPI = 0.22 -(-0.10) = 0.32
March Stagflation Index = 0.32 X 100 = 32
For a fascinating discussion on our “shadow financial system” including reckless banking and commodities deregulation, listen to Michael Greenberger on NPR’s Fresh Air with Terry Gross. Greenberger explains how we got into the current financial collapse.
To date, the Obama Administration has done little to remedy the legal and regulatory problems Greenberger describes.
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