Wow, a lot of bad news about the economy today.
Inflation is at a 17 year high. Prices paid at the retail level are up 5% on an annual basis in June. That’s the biggest 12 month change since May 1991.
But, the Labor Department shows that the average wage only rose 3.4% over the same 12 month period.
Effectively, you are making 1.6% less than you were at this time last year.
Energy prices are up 6.6% and grocery store prices are up 6.1% (cereals and bakery products up 10.4%) compared to a year ago.
One measure of the economic stress being felt is the economic misery index, something I’ve never heard of, which adds together the 12 month inflation rate and the unemployment rate. The misery index is now at 10.2, the first time it has hit double digits since 1992.
In other news, Fitch Ratings says that United, Delta, USAirways, JetBlue and Southwest will have a difficult time generating enough revenue to cover rising costs after Labor Day, when air travel typically slows down, and bankruptcies are a possibility. American Airlines and Continental were listed as stable.
