Department of Labor whiffs on fourth-quarter results

OPINION:

In President Biden’s State of the Union address this year, he touted America’s strong economy, stating: “Inflation has fallen every month for the last six months, while take-home pay has gone up.”

Mr. Biden was presumably basing this statement on the Bureau of Labor Statistics, which reported a 4.9% rise in wages in the fourth quarter of 2022.

It was all bogus.

This month, BLS quietly revised those numbers without much explanation, changing the 4.9% increase in hourly compensation estimate to a decrease of 0.7% — a radical 5 percentage points downward. It’s statistical malpractice verging on fraud. Adjusted for inflation (which is still looming at 4.9%), wages have declined by 4.7%.

What’s worse is the initial estimate fueled the Federal Reserve and the White House’s narrative that higher wages were the top barrier to taming inflation, not out-of-control federal spending. It was used to fuel positive headlines about a strong job market and the reason the Fed had to keep raising interest rates.

“To be clear, strong wage growth is a good thing,” Fed Chairman Jerome Powell said in November. “But for wage growth to be sustainable, it needs to be consistent with 2% inflation.”

“U.S. labor market shrugs off recession fears; keeps Fed on tightening path,” a Reuters headline read at the time. “Hiring, wages top forecasts, keeping press on Fed,” Bloomberg reported. “Wall Street is bummed about yet another strong jobs report,” Fortune said, citing “wages for U.S. workers are accelerating, which is good news for them.”

“Workers’ wages are higher now than they were seven months ago, adjusted for inflation,” Mr. Biden bragged in January. He has repeated the claim various times this year on the campaign trail.

According to the revised fourth-quarter estimates, nonfarm business real hourly compensation decreased 4.7%, business wages fell 4.3%, nonfinancial corporate wages dropped 3.2%, manufacturing sunk 4.1%, durable manufacturing plunged 5.4%, and nondurable manufacturing lost 1.7%.

The good news is Americans are not buying what the White House is trying to sell. Last week, Mr. Biden’s approval rating slipped to 41%, close to the lowest level in his presidency, according to a Reuters/Ipsos poll.

“The economy remained the top concern, amid high rates of inflation and a push by central bankers to tame prices by raising interest rates, which has made mortgages and car loans costlier,” the report read.

Mr. Biden’s and Democrats’ failed policies are squeezing Americans’ wallets and robbing them of their hard-earned money. April’s consumer price index soared by 4.9% compared with last year, remaining excessively high and well above the Fed’s average target of 2%.

Core consumer prices excluding food and energy rose 5.5% from last year. Real average hourly earnings fell 0.5% since last year, marking the 25th month in a row under Mr. Biden in which inflation has outpaced wages year-over-year. And real wages have been negative year-over-year ever since Mr. Biden and Democrats passed their wasteful $1.9 trillion “stimulus.”

Some 80% of Americans say they are changing their summer vacation plans because of inflation, according to the online financial adviser Bankrate.com. Of the more than one-third of Americans who say they are not taking a summer vacation, 58% said that this is the case because they can’t afford to, up from 48% last year.

In reality, Bidenomics is draining Americans’ pocketbooks, and people are taking note, no matter what false narrative the White House tries to spin from the podium with fake numbers.