By Robert Reich
Employers added 261,000 jobs in October on a seasonally adjusted basis, the Labor Department said today. That was down from 315,000 in September. The unemployment rate rose to 3.7 percent.
Average hourly earnings climbed by 4.7 percent in the year through October. Consumer prices grew 8.2 percent through September.
Bottom line: Workers are losing purchasing power more rapidly now than they have at any point over the last year.
This may explain why the share of Americans between the prime working ages of 25 and 54 who are working or looking for work fell to 82.5 percent in October – down from 82.7 percent in the previous month. At the beginning of 2020, the number stood at 83.1 percent.
Why aren’t more people working? Because pay is lousy.
So why does Jerome H. Powell, the Fed chair, insist, as he did at a news conference this week, that “the broader picture is of an overheated labor market where demand substantially exceeds supply”?
No, Mr. Chairman. The broader picture is of slowing job and wage growth — even though prices continue to rise and the Fed continues to raise interest rates.
Powell and the Fed lifted interest rates by three-quarters of a point this week, and signaled more increases to come. Presumably, they’ll continue to raise rates until they push the economy into recession, thereby pushing most working people into ever-greater peril.
This borders on insanity.
The broader picture is of big corporations continuing to raise their prices above their rising costs (including their labor costs). Why? Because they can. They have enough market power to get away with this — using inflation as a cover.
Last weekend, ExxonMobil posted the highest quarterly profit in its 152-year history, and Chevron the second-highest quarterly profit since its own founding. Oil company profits have been soaring for the past year, prompting many other nations (including the U.K., governed by those crazy left-wing Tories) to adopt windfall profits taxes of their own.
Finally, last Monday, President Biden called for a windfall profits tax on oil companies if their prices didn’t drop or didn’t offer rebates to consumers.
A bit late, me thinks.
We’re four days before one of the most consequential elections in history. Democrats should be — and should have been — raising the alarm about corporate power.