This is a chart that doesn’t get nearly enough attention.
It’s median household income adjusted for inflation. From 1968 to 2000, incomes rose 39.3%. From 2000 until now, they’ve fallen 9% with almost all of the decline since the crisis. The Fed is in fantasyland if it thinks inflation is coming. Take away rising house price , stock market gains and other QE-related hocus pocus and you have a deflationary economy.
US median household income in 2011 dollars
The Fed worries about deflationary expectations setting in but they’re looking in the wrong places. They look at people withholding purchases because of expectations about lower sticker prices but the deflationary expectations have set into the jobs market.
HR departments are driving down starting wages and workers have now accepted it. And no one dreams of asking for a raise.
There is jobs growth but a new paradigm has set into the employment market and it’s not pretty.