As President Obama held his last press conference this afternoon, basking in the warm afterglow of an over-sampled poll showing his favorability near record highs, it would appear he (and the press corps) forgot to mention that for most Americans - the 80% in production and nonsupervisory roles - this morning's data showed real wages actually dropping for the first time since 2013.

Bloomberg's Vincent Cignarella notes "Costs are rising, while pay isn’t: is the U.S. on the road to stagflation?" Disposable income for U.S. consumers, as measured by real average earnings, took another turn lower in December as we noted earlier with headline inflation rising above 2% for the first time in more than two years.

As The Wall Street Journal reports, for several years now, wages have become a key barometer not only on the recovery, but on how much of the recovery is filtering down to the working class.

Companies have been reluctant to invest in their business without clearer signs of consumer demand, the key ingredient in crafting a organically strong economy. Wages and consumer demand trends underlie every valuation bet being placed in the markets right now. Understanding what is and isn’t happening is critical. The inflation numbers get netted out against wage growth, to produce the “real,” or inflation-adjusted, wage rates. Average hourly wages, as per the December jobs report, rose 2.9% from a year ago. So, if you just compare that number to the inflation number, real average hourly earnings rose 0.8%. A deeper dive, though, reveals that for many Americans, their wages are not outpacing inflation at all. For all production and nonsupervisory employees – a group that comprises 80% of all jobs in america – total average weekly earnings in December rose to $732.48 (about $38,000 a year) from $718.79 – up 1.9%. That rate is below this morning’s inflation numbers. So, again according to the BLS, average weekly earnings fell 0.1%.

That’s right. For 80% of American workers, their weekly paycheck, adjusted for inflation, fell in 2016.

This could be trouble for the Federal Reserve and lead to a more dovish stance, especially if Trump’s economic promises come up short.

As Bloomberg's Cignarella notes, if the Fed cuts its rate hike expectations because of stagnant wages as inflation keeps accelerating, it could continue to erode real U.S. earnings and lead to a lower dollar as it has in the past.

This decline in disposable income may be the reason retail sales, while generally positive, have been trending lower during the same period.

This could lead to slower economic growth, while prices continue to rise: stagflation.

The Trump reflation trade may be the only thing that stands in the way, but details are scant.

Lack of clarity on fiscal spending will continue to restrain capital spending, which some argue has been restricted by excess regulation. A reluctant consumer along with miserly business investment would certainly change the Fed’s rate hike projections.

The overall story remains, there is excess supply and mild demand.

With capital expenditure new orders trending sideways and retail sales and real wages declining, the ground for stagflation has already been laid.

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