In July, exceptional corporate earnings buoyed markets. Data also shed light on other optimistic trends including strong retails sales, above trend GDP and further declining unemployment.
But what of personal earnings, aka wages?
Nominal wages increased 2.7% year-over-year. That doesn’t sound too bad, does it? The problem is real wage gains were…exactly zero.
Once year-over-year inflation of 2.7% is accounted for real wage growth was a tidy paltry 0.0%.
For perspective, US average hourly earnings went from $26.26/hour in June 2017 to $26.98/hour in June 2018.
Considering consumer spending comprises 68% of the US economy, it is hard to envision corporate earnings continuing to climb while humanoid earnings only stagnate.
Weekly Update through August 3, 2018 The S&P 500 added 80bps, even as the Dow Jones gained 5bps, the Russell 2000 gained 63bps, the Nasdaq added 98bps.
As for US bonds, they climbed 14bps.
Globally, the MSCI World Index was flat and the Barclays Global Aggregate Bond Index lost -27bps.
The Euro Stoxx 50 lost -1.20% in local-currency (Euro) and -1.74% in USD. Meanwhile, the Topix declined -1.87% local-currency (Yen) and -2.20% in USD.
Month-end Update through end-July 2018 In July, the S&P 500 added 3.72%, the Dow Jones gained 4.83%, the Russell 2000 added 1.74% and the Nasdaq gained 2.19%.
As for US bonds, they increased 2bps.
Globally, the MSCI World Index added 3.15% and the Barclays Global Aggregate Bond Index declined -17bps.
In July, the Euro Stoxx 50 added 3.96% in local-currency (Euro) and 4.21% in USD. Meanwhile, the Topix gained 1.30% in local-currency (Yen) and 38bps in USD.In July, exceptional corporate earnings buoyed markets. Data also shed light on other optimistic trends including strong retails sales, above trend GDP and further declining unemployment.
But what of personal earnings, aka wages?
Nominal wages increased 2.7% year-over-year. That doesn’t sound too bad, does it? The problem is real wage gains were…exactly zero.
Once year-over-year inflation of 2.7% is accounted for real wage growth was a tidy paltry 0.0%.
For perspective, US average hourly earnings went from $26.26/hour in June 2017 to $26.98/hour in June 2018.
Considering consumer spending comprises 68% of the US economy, it is hard to envision corporate earnings continuing to climb while humanoid earnings only stagnate.
Weekly Update through August 3, 2018 The S&P 500 added 80bps, even as the Dow Jones gained 5bps, the Russell 2000 gained 63bps, the Nasdaq added 98bps.
As for US bonds, they climbed 14bps.
Globally, the MSCI World Index was flat and the Barclays Global Aggregate Bond Index lost -27bps.
The Euro Stoxx 50 lost -1.20% in local-currency (Euro) and -1.74% in USD. Meanwhile, the Topix declined -1.87% local-currency (Yen) and -2.20% in USD.
Month-end Update through end-July 2018 In July, the S&P 500 added 3.72%, the Dow Jones gained 4.83%, the Russell 2000 added 1.74% and the Nasdaq gained 2.19%.
As for US bonds, they increased 2bps.
Globally, the MSCI World Index added 3.15% and the Barclays Global Aggregate Bond Index declined -17bps.
In July, the Euro Stoxx 50 added 3.96% in local-currency (Euro) and 4.21% in USD. Meanwhile, the Topix gained 1.30% in local-currency (Yen) and 38bps in USD.
