Where’s my raise? Pay growth lags behind pre-recession norms
WASHINGTON (AP) — Eight years after the Great Recession ended, the economy is steadily churning out jobs, and the unemployment rate is at a 16-year low.
Yet for most Americans, a key measure of economic health — pay growth — still lags behind pre-recession norms.
That isn’t likely to change Friday, when the Labor Department will release the U.S. jobs report for June. Economists have forecast that employers added a solid 177,000 jobs last month and that the unemployment rate remained 4.3 percent, the lowest level since 2001. The job market, in other words, has proved itself resilient.
Pay raises are another story, and a puzzling one. Analysts expect Friday’s report to show that average hourly wages rose just 2.6 percent from a year earlier, according to data provider FactSet. That’s well below the 3 percent to 3.5 percent average pay raises that have been typical in a healthy economy.
The Federal Reserve monitors the barometers of wage growth for any evidence that inflation might be starting to pick up. Inflation has remained persistently low since the recession ended — lower even than the Fed’s 2 percent target rate, which it regards as consistent with a healthy economy.
Illinois House approves state budget, ends historic impasse
SPRINGFIELD, Ill. (AP) — The Illinois House voted Thursday to override Gov. Bruce Rauner’s vetoes of a budget package, giving the state its first spending blueprint in than two years and ending the nation’s longest fiscal stalemate since at least the Great Depression.
The budget is retroactive to July 1 — the start of the fiscal year. That’s the date a permanent 32 percent tax increase takes effect. Individuals will pay 4.95 percent instead of 3.75 percent. The corporate rate jumps to 7 percent from 5.25 percent.
Rauner vetoed the measures because he sees no indication that the Democratic-controlled Legislature will send him the “structural” changes he’s demanded. Those include a statewide property tax freeze, cost-cutting restrictions on compensation for injured workers, changes to pension benefits for state employees, and reforms making it easier for voters to merge or eliminate local governing bodies.
The standoff has had potentially disastrous side effects.
Credit-rating houses threatened to downgrade the state’s creditworthiness to “junk,” signaling to investors that buying Illinois debt is a highly speculative venture. The bond houses predicted a downgrade without a fix by the July 1 start of the fiscal year — the third consecutive fiscal year Illinois has opened without an approved budget plan. But Fitch Ratings and S&P Global Ratings gave Illinois some breathing room on Monday, issuing notices marking the House tax increase approval a day earlier and indicating they wouldn’t take immediate downgrade action.
Pre-emptive US strike on North Korea could be ‘catastrophic’
WASHINGTON (AP) — A pre-emptive military strike may be among the “pretty severe things” President Donald Trump says he is considering for North Korea, but it’s a step so fraught with risk that it ranks as among the unlikeliest options.
Even a so-called surgical strike aimed at the North’s partially hidden nuclear and missile force is unlikely to destroy the arsenal or stop its leader, Kim Jong Un, from swiftly retaliating with long-range artillery that could kill stunning numbers in South Korea within minutes.
An all-out conflict could then ensue. And while Trump’s Pentagon chief, Jim Mattis, says the U.S. would prevail, he believes it would be “a catastrophic war.”
In Poland on Thursday, Trump said the time has arrived to confront North Korea.
“I don’t like to talk about what I have planned, but I have some pretty severe things that we’re thinking about,” the president said. “That doesn’t mean we’re going to do them.”
Qatar’s defiance might spur Arab quartet to act
DUBAI, United Arab Emirates (AP) — Qatar is showing no signs that it is about to bend to the demands of the four Arab countries lined up against it.
That puts the quartet of Saudi Arabia, the United Arab Emirates, Egypt and Bahrain, which have accused Doha of a host of transgressions, including backing extremist groups, in a tough spot.
By refusing to give in to the Arab states’ ultimatum, tiny but wealthy Qatar is calling their bluff and forcing them to prove how much leverage they actually have over their wayward neighbor — which could spur them to impose more punitive sanctions.
Their options are limited, however. To really hit Qatar where it hurts would involve measures like forcing Gulf banks to pull their deposits out of the country or, even more dramatically, disrupting shipments of its economic lifeblood, natural gas — an escalation few analysts believe the countries seriously have an appetite for.
The 13-point list of demands the four sent to Doha was always going to be a hard sell.
Mother charged with killing 4 of her kids and their father
LOGANVILLE, Ga. (AP) — Four young children and their father were found slain in a home outside Atlanta early Thursday, and police say the mother — now charged with their deaths — was the one who called 911 to report the killings.
The five were apparently stabbed to death. A fifth child, a girl, survived and was hospitalized with injuries described as serious, police said.
The woman was detained by police after the bodies were found inside the home in Loganville, Gwinnett County police Cpl. Michele Pihera told reporters at the scene. Police later charged 33-year-old Isabel Martinez with five counts of malice murder, five counts of murder and six counts of aggravated assault.
“She was quickly taken into custody and right now she’s at Gwinnett County Police Headquarters being interviewed,” Pihera said. Police have not said whether she was injured and said a motive wasn’t immediately known.
“Right now we believe we have everybody involved in this crime,” Pihera said, adding that she does not want people in the community to think that a dangerous person is at large.
