The Beige book lived up to it's name, it was pretty bland today...there was one nugget that caught my eye that may get reexamined when the Employment Cost index report is released (tomorrow):
District reports suggested that price and wage inflation remained broadly in check, although increases were noted in the energy, transportation, and insurance industries. Atlanta reported that health care insurance premiums rose at a double-digit rate in June and early July. The rising costs of employee benefits, most notably health insurance and pensions, boosted non-wage labor costs in the Chicago, Dallas, Kansas City, and San Francisco districts. Most district reports described wage increases as minimal, and Kansas City reported that firms were providing no more than cost-of-living increases. Contacts in Dallas and Kansas City noted that rising benefit costs were being passed on to employees, and San Francisco reported that higher labor costs could restrain hiring in the near-term.
Benefit costs continue to act as a tax, and continues to blunt the expected impact of "tax cuts" (which are actually simply tax shifts from the Feds to states and municipalities who can't print their way out of deficits). I expect that employment costs will continue to rise even as take home pay declines (note that employees aren't generally getting wage increases in real terms, but since health benefit costs are increasingly shifted to employees, their take home pay should be decreasing. And thats for the lucky few who still have jobs, the others are, well, farked. |
