A serious problem is hiding behind this month’s report from the U.S. Labor Department. On the surface, the figures seem positive. Job growth was only slightly lower than expected (157,000 added last month), and the unemployment rate is impressively low at 3.9 percent. But these figures belie the fact that wage rate growth is lower than expected at 2.7 percent compared to last year and that average hourly earnings grew only 0.3 percent compared to the previous month. Particularly concerning is that the Labor Department revised last month’s June average hourly earnings growth rate down to 0.1 percent, meaning average hourly earnings adjusted for inflation were essentially flat. Just this month, the Labor Department reported that the Consumer Price Index in June increased 2.9 percent compared to the previous year – the second consecutive month that inflation offset workers’ real hourly earnings. The recent report, then, is a reminder that joblessness is not the United States’ most pressing economic problem; inequality is.

- Geopolitical Futures daily memo Sat Aug 4