RT The Kobeissi Letter (@KobeissiLetter)Low-income earners are struggling:The 3-month average of the bottom 33% of Americans' after-tax YoY wage growth dropped to 0.9% in August, the slowest pace since 2016.This is a significant decline from the +3.0% seen at the beginning of the year.At the same time, the top third saw +3.6% YoY growth, the highest since November 2021.In other words, top earners’ wages are growing 4 TIMES faster than those of low-income consumers.By comparison, middle-income earners’ salar ...

Wage Growth - German wage growth experienced a jump in the second quarter [1] - Recent agreements suggest lower wage increases are expected in the future [1]

UK Economic Outlook - The recovery in UK living standards is ending [1] - This poses a potential challenge for Prime Minister Keir Starmer [1] Political Implications - Starmer has emphasized wage growth as evidence of his commitment to improving the financial well-being of "working people" [1]

Societal Trends & Challenges - The percentage of 30-year-olds who are married and homeowners has declined from 50% in the 1950s to 12% currently [1] - Young men may lack social skills, leading to increased online communication and fragile relationships [3] - Pornography consumption is high, with over 50% of 12-year-old boys watching it [5][6] - Dating sites are optimized for user retention rather than relationship formation, contributing to loneliness [7] Economic Factors - Home prices have increased significantly relative to income since 1980, making homeownership unaffordable for many individuals [10] - Stagnant real wage growth, coupled with student loan debt, makes it difficult for young people to start families and achieve financial stability [19] - Government intervention in housing and education through programs like the Federal Home Loan Program and Federal Student Loan Program may have created bubbles of inaffordability [16][17] Generational & Educational Issues - A generation was wrongly advised to pursue university education to avoid job automation, leading to significant debt [22][23][24] - Trade jobs like electricians and plumbers can offer high income and no debt, potentially surpassing the financial well-being of some professionals with advanced degrees [24][25] Mental Health - Major depressive episodes are prevalent among US adults aged 18-25 [13] - Excessive internet use and social media can exacerbate feelings of isolation and inadequacy [15]

Economic Challenges - Housing costs have significantly increased relative to income, posing affordability issues [1] - Student loan debt of $100,000 presents a substantial financial burden for young individuals [1] - Real wage growth has stagnated, except for high-income earners [1] - Low wages combined with high debt levels hinder the ability of younger generations to achieve the American dream [4] Political & Social Implications - The issue of real wage growth is expected to be a key topic in the next election cycle [2] - There is a growing disparity between top earners and minimum wage in the United States compared to other developed countries [3] - Slow job gains were observed in New York City during the first half of 2025 [3] Generational Impact - Previous generations have negatively impacted younger generations due to rising costs of homes and education [1] - Young people are facing difficulties in the job market [4]

Labor Market & Wage Growth - Australia's annual wage growth remained elevated last quarter [1] - The report underscores a tight labor market [1] Productivity & Economic Challenges - Persistently weak productivity is a key challenge [1] - The Reserve Bank seeks to rein in cost pressures [1]

Wage Growth vs Inflation - Wage growth for many Americans lags behind inflation [1] - Low- and middle-paying job holders are experiencing the most financial strain [1]

Group 1 - The U.S. added 209,000 non-farm jobs in July, exceeding expectations of 180,000, marking the ninth consecutive month of better-than-expected job growth [1] - The unemployment rate unexpectedly rose from 3.6% to 4.1%, the highest level since November 2021 [1] - Hourly wage growth slowed to 4.0% year-on-year, the lowest since mid-2021, down from 4.1% [1] Group 2 - Job losses were noted in retail (-9,000) and transportation and warehousing (-11,000), indicating companies are cutting non-essential positions [1] - The unemployment rate of 4.1% is close to the Federal Reserve's tolerance limit, historically indicating a potential policy shift when exceeding 4% [1] - The wage-inflation spiral is loosening, with hourly wage growth narrowing for four consecutive quarters, easing upward price pressures [1] Group 3 - The U.S. dollar index fell by 0.8%, marking the largest drop in a month, as expectations for interest rate cuts increased [1] - Spot gold surged by 1.2%, reaching $2,370, driven by safe-haven demand and a weaker dollar [1] - The yield on 10-year U.S. Treasuries dropped by 15 basis points, marking the best single-day performance in three months [1] Group 4 - The market is now pricing in an 85% probability of a rate cut in September, up from 68% before the data release [1] - CME interest rate futures indicate the Federal Reserve may cut rates twice this year, in September and December [1] - The narrowing of high-yield bond spreads suggests a potential decrease in borrowing costs for small and medium-sized enterprises [1] Group 5 - Ordinary investors are advised to increase holdings in medium to long-term U.S. Treasuries and allocate to gold ETFs while remaining cautious on cyclical stocks [1]

Wage Growth vs Inflation - Wage growth for many Americans lags behind inflation [1] - Low- and middle-paying job holders are experiencing the most financial strain [1]

Wage Growth & Inflation - Euro zone wage growth is projected to decelerate significantly at the start of next year [1] - The ECB's efforts have successfully brought inflation under control [1]