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Comment by _gabe_ | Hacker News Reader

> Strong labor numbers means wages would be increasing

How can you equate these two? Couldn't strong labor numbers also be indicative of an economy in turmoil, forcing many people who no longer had to work back into a job to get by? I guess what I'm trying to say is, shouldn't we be taking a look at the data holistically instead of nabbing one good data point and using that to promote a narrative? Inflation, COL, real wages, unemployment, and many other factors all contribute to the overall picture. Why aren't we using all this data instead of focusing on unemployment only?

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That’s exactly right. Real wages are not keeping up with inflation. Inflation is confusing everyone who isn’t used to seeing it. It’s ludicrous to think we are not in a recession just because more people retired in the last few years due to COVID and exited the workforce to artificially keep the unemployment rate low. Participation in the workforce declined something like 10% - I don’t have the time find the exact number. But we still have a lower overall workforce than pre-COVID. The 100K per year jobs are declining in availability but there’s millions of jobs at fast food and retail available. It’s obvious that it is purely political as to what makes a “recession.” Meanwhile lots of tech companies have lost 70-80% of their value. But the largest companies, apple, google, and Microsoft are holding up, we all know the small businesses go first.

> Real wages are not keeping up with inflation.

Nope? For most people Year/Year and also over the last quarter, real wages have gone up. It is only for the most highly compensated workers (top 10% or so) that wages have not kept up with pricing. [0]

[0]: https://realtimeinequality.org/

Real wages have gone significantly since 2020 when COVID hit per the below link. This inequality index website includes both labor and capital - meaning not just wages but income from stocks. Yes the stock market has gone down, the rich own more stocks, and so rich made less money. Wages, the payment for only labor has been declining in real terms due to inflation outpacing wage growth. See this link and the sharp decline.https://fred.stlouisfed.org/series/LES1252881600Q

> the stock market has gone down, the rich own more stocks, and so rich made less money

My link shows that real factor income for all but the top 10% of earners is up which includes wages and capital income.

Your FRED link will have to contend with the fact that those most likely to be unemployed at the start of the pandemic are lower earners which is going to shift up the wages for 2020.

The website you linked as I said includes capital and pretax income which is an absurd way to measure “income.” That includes stocks, 401K, houses, etc. if someone owned a house, the value went up, but if someone didn’t own a house their actual wages are still worth only about the same as 3 years ago.

Strong labor numbers are often correlated with increasing wages (if labor is in short support, wages usually go up) but there's no direct connection; labor numbers could be increasing because people are being "forced" (or deciding to go back) into the labor force because the covid subsidies have dried up; those who took time during covid to homeschool, etc.

All of this all of it is just an attempt to measure if people "feel good" about how things are going, or feel bad; and the general consensus seems to be "things aren't great but they're not horrible ... yet".

The other thing to remember is that lots of economic reporting is 'standard spherical cow' type - inflation may be skyrocketing in the exact things that do not affect you - if you work from home in a house you own on a fixed mortgage, then perhaps the gas prices aren't directly affecting you.

If you're a independent trucker renting, then they hit much harder.

> How can you equate these two? Couldn't strong labor numbers also be indicative of an economy in turmoil, forcing many people who no longer had to work back into a job to get by?

Because the other side of that is that there exists sufficient and growing demand for labor to accept the people wanting to sell their labor.

It is an economic principle that very low unemployment leads to competition for wworkers via increased wages, which help drive inflation up (as the increased labor costs lead to a more expensive output). The inverse is also true. So, central banks prefer inflation to not be zero, but not be high either (often, central banks have inflation as one of their target numbers that drives their policy).

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