It's been about 11 months since Republicans passed their tax cuts for corporations and the rich which they claimed would dramatically increase wages for average Americans, but wages just saw their smallest increase in over 15 months.
A new Commerce Department report released this morning shows that wages increased by about 0.2 percent during the month of September -- the smallest amount since June of 2017 -- but inflation also increased by 0.2 percent, effectively canceling the increase.
Personal income rose 0.2 percent last month, the smallest increase since June 2017, after gaining 0.4 percent in August. Disposable income also increased 0.2 percent. Wages climbed 0.2 percent after jumping 0.5 percent in August. [...]
In September, spending on goods surged 0.6 percent. Consumers also spent more on sporting goods. Outlays on services gained 0.3 percent, with spending on health care offsetting a decrease in spending at restaurants and on accommodation.
Prices continued to rise steadily in September. The personal consumption expenditures (PCE) price index excluding the volatile food and energy components rose 0.2 percent after being flat in August.
Analysts and economists who spoke to Reuters say they believe we're going to see a very strong holiday shopping season, but stimulus from the GOP's tax cuts peaked during the third quarter.
If that's truly the case, it should concern everyone. That would mean their stimulus peaked at 3.5 percent economic growth during a time when wages were effectively flat. Wages increased by a more reasonable amount during the month of August, but that appears to have been a blip. Wages increased by 0 in September after inflation. Some Republicans including White House officials claimed their tax cuts would increase take-home pay for most Americans by $4,000 per year; an obvious fantasy.
We also don't know exactly what percentage of growth the tax cuts have contributed to (and probably won't know until next year), but you may recall that analysis conducted before the tax cuts were passed predicted it could be as little as 0.5 percent per year.
It's not as if things are going to get better from here. Economics may be right that growth from the tax cuts peaked during the third quarter of this year, but the tax cuts will still be with us for the foreseeable future. The tax cuts will continue to contribute to the federal deficit while providing no benefit in return for the overwhelming majority of Americans.