Perspectives on Labor Day 2011

As summer comes to an end ahead of Labor Day, many might ask if American workers are better off than a year ago.  Surprisingly, the answer is yes, although the improvement in many respects is relatively modest and many households continue to struggle.

The national jobless rate stands at 9.1%, down from 9.6% a year ago.  An additional 1.4 million Americans are working compared with a year ago.  In terms of workers’ 401(k) plans, despite the stock market’s recent turmoil, the S&P 500 benchmark index is up 16% from its year-ago level. 

Workers have generally seen some rise in their paychecks during the past twelve months, with hourly earnings up 2.3% during the past year. 

Unfortunately, prices (led by food and energy) have climbed even faster, with a rise estimated at slightly over 3.0%.  Workers owning homes have also seen little improvement in that part of their wealth.  The national Case-Shiller home price index is down about 4.5% from a year ago.

 On balance, the latest survey shows Americans more concerned about the future than the present.  A lack of confidence may be our biggest problem this Labor Day.


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