{"id":5930,"date":"2023-11-02T08:26:05","date_gmt":"2023-11-02T08:26:05","guid":{"rendered":"https:\/\/connectwithfund.com\/business\/american-inequality-is-rising-despite-higher-wages\/"},"modified":"2023-11-02T08:26:06","modified_gmt":"2023-11-02T08:26:06","slug":"american-inequality-is-rising-despite-higher-wages","status":"publish","type":"post","link":"https:\/\/connectwithfund.com\/?p=5930","title":{"rendered":"American inequality is rising despite higher wages"},"content":{"rendered":"
\n

\n A version of this story first appeared in CNN Business\u2019 Before the Bell newsletter. Not a subscriber? You can sign up\u00a0<\/em>right here<\/em>. You can listen to an audio version of the newsletter by clicking the same link.<\/em>\n <\/p>\n<\/p>\n

\n The labor market is strong and Americans <\/strong>are earning more money.\n <\/p>\n

\n But they should probably hold off on the champagne and caviar because while the rich are definitely getting richer, for everyone else, the story is a bit more complicated.\n <\/p>\n

\n What\u2019s happening:<\/strong> Tuesday\u2019s Employment Cost Index showed that total compensation paid to US workers grew at a faster pace than expected last quarter.\n <\/p>\n

\n Wage growth advanced at a healthy 1.2% pace in the July-through-September period, accelerating from the 1% rise that the Labor Department reported for the three-month period ending in June.\n <\/p>\n

\n This month\u2019s Survey of Consumer Finances, published by the Board of Governors of the Federal Reserve Board last week, also showed that American households were getting wealthier.\n <\/p>\n

\n The Fed survey found that the the average net worth of an American household when adjusted for inflation was a whopping $1.06 million in 2022, up from $868,000 in 2019.\n <\/p>\n

\n The median (or mid-point) net worth for households has also increased. It\u2019s 37% higher since 2019. However, it was significantly lower than the millionaire-making mean \u2014 coming in at $192,900.\n <\/p>\n

\n The median is resistant to outliers, <\/strong>making it <\/strong>a more reliable measure than the mean, which can be skewed by extreme values.\n <\/p>\n

\n And while <\/strong>the median net worth has increased significantly, it\u2019s still under $200,000 \u2014 far short of the estimated amount Americans should have in retirement savings.\n <\/p>\n

\n The numbers become more drastic when broken into income brackets: The top 10% of wage earners (who have an average net worth of about $6.6 million) saw their incomes increase by about 22% between 2019 and 2022. Middle-income wage earners saw a 5% increase over the same period.\n <\/p>\n

\n There was \u201csome increase in income inequality over this period,\u201d said the Fed. Indeed it was one of the largest three-year increases in income inequality over the history of the modern survey, according to the Fed.\n <\/p>\n

\n That widening gulf between the haves and the have-nots could help explain why Americans are losing confidence about the economic outlook.\n <\/p>\n

\n For the third month in a row, the Conference Board\u2019s Consumer Confidence Index fell \u2014 dropping to 102.6 in October from an upwardly revised 104.3 in September. The index is at its second-lowest level this year, landing a hair above May\u2019s 102.5 reading, according to Conference Board data released Tuesday.\n <\/p>\n

\n And high prices are making people feel worse. \u201cConsumers continued to be preoccupied with rising prices in general, and for grocery and gasoline prices in particular,\u201d Dana Peterson, chief economist at the Conference Board, said in a statement on Tuesday.\n <\/p>\n

\n Consumers with a household income between $25,000 to $35,000 saw the biggest decline in confidence about the economy over the past month. In contrast, consumers with a household income between $100,000 to $125,000 saw the biggest jump in confidence over the past month.\n <\/p>\n

\n Bridging the investment gap:<\/strong> That being said, the rise in retail investing has increased significantly since 2019, according to Fed data.\n <\/p>\n

\n The percentage of American families that own individual stocks and not just retirement funds is near record highs. Share ownership among Americans under 35, who traditionally don\u2019t invest as much as their older counterparts, has hit a record high. As has investment from Black and Hispanic Americans.\n <\/p>\n

\n That means the economics of Wall Street, not just Main Street, have an increasing impact on the wallets of everyday Americans.\n <\/p>\n

\n In October, the Dow fell 1.4% and the S&P 500 slid 2.2%. Both indexes notched their first three-month streak of declines since March 2020. The Nasdaq Composite slipped 2.8%.\n <\/p>\n

\n Bud Light continues to drag on Anheuser-Busch InBev\u2019s bottom line in the United States, reports my colleague Jordan Valinsky.\n <\/p>\n

\n AB InBev said that sales to US retailers declined nearly 17% \u201cprimarily due to the volume decline of Bud Light.\u201d In response, the company cut deals with wholesalers,\u00a0including writing checks\u00a0to distributors, and\u00a0increasing marketing spend\u00a0on the brand. But that took a toll on the company\u2019s bottom line, and contributed to a 29% decline in adjusted US earnings.\n <\/p>\n

\n Tuesday\u2019s report painted a bleak picture for Bud Light, sales and shipments of which have\u00a0weakened dramatically\u00a0since its brief and limited partnership with trans influencer\u00a0Dylan Mulvaney\u00a0in the spring.\n <\/p>\n

\n In the summer, Bud Light lost its long-held\u00a0top-selling American beer title to rival Modelo.\u00a0The Constellation-owned brand has been making inroads in the US market for several years as customers switch their tastes to Mexican lagers.\n <\/p>\n

\n Sales of Bud Light are still sinking, with volumes down 30% year-over-year for the four weeks ending on October 7, according to NIQ data given to Beer Business Daily newsletter.\n <\/p>\n

\n In an effort to jumpstart sales, Bud Light has been rolling out marketing campaigns and partnerships it thinks will placate fans. The company has, for example, run ads featuring NFL players which include taglines like \u201ceasy to drink\u201d and \u201ceasy to enjoy.\u201d\n <\/p>\n

\n And last week, the UFC switched their beer sponsorship from Modelo to Bud Light in a\u00a0reportedly record-breaking deal\u00a0as part of AB\u2019s revitalization efforts of the brand.\n <\/p>\n

\n While you were busy handing out candy to trick-or-treaters, Federal Reserve officials were doing something a lot less fun, most people would say.\n <\/p>\n

\n They were discussing the state of the economy and preparing for today\u2019s big decision on interest rates.\n <\/p>\n

\n This time around, however, it doesn\u2019t feel like such a big decision. That\u2019s because the central bank is widely expected to hold interest rates steady for the second meeting in a row, reports my colleague Elisabeth Buchwald.\n <\/p>\n

\n It may seem a little strange given all the recent data that\u2019s suggesting the economy has been fairly strong, but that\u2019s because what may appear like good news for the economy isn\u2019t necessarily that good.\n <\/p>\n

\n For instance, last week\u2019s\u00a0gross domestic product report, which showed the economy grew at a remarkably strong pace in the third quarter, on the surface sounds like something worthy of celebrating. The Biden administration certainly did.\n <\/p>\n

\n But many economists\u2019 worried that the third-quarter GDP report shows the economy isn\u2019t growing at a sustainable pace.\n <\/p>\n

\n In other words, the good times may not last very long before the party\u2019s over and the economy wakes up with a big hangover.\n <\/p>\n<\/p><\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

A version of this story first appeared in CNN Business\u2019 Before the Bell newsletter. Not a subscriber? You can sign up\u00a0right here. You can listen to an audio version of the newsletter by clicking the same link. The labor market is strong and Americans are earning more money. But they should probably hold off on the champagne and caviar because while the rich are definitely getting richer, for everyone else, the story is a bit more complicated. What\u2019s happening: Tuesday\u2019s Employment Cost Index showed that total compensation paid to US workers grew at a faster pace than expected last quarter.<\/p>\n","protected":false},"author":1,"featured_media":5931,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[],"class_list":["post-5930","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"yoast_head":"\nAmerican inequality is rising despite higher wages | ConnectWithFund<\/title>\n<meta name=\"description\" content=\"A version of this story first appeared in CNN Business\u2019 Before the Bell newsletter. Not a subscriber? You can sign up\u00a0right here. 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