Economic Analysis: Wages Are Not Behaving

Here are 12 tweets concerning the state of the economy and the outlook going forward from Jim Bianco.

1/12

In the interview below, I expressed concerns about wage growth. I might be too low!

I detail my thinking in this 🧵 https://t.co/YVUofCCB15

— Jim Bianco (@biancoresearch) May 10, 2026

2/12
April wages rose 0.2% (less than expected) to a y/y growth of 3.6% (blue). Normally, this is good news, indicating wage inflation is under control.

However, gasoline is soaring, narrowing the gap (bottom line) to CPI (orange). pic.twitter.com/g6TAgAwf2z

— Jim Bianco (@biancoresearch) May 10, 2026

3/12

The Cleveland Fed's Inflation Nowcast shows y/y CPI rising to 3.9% by May (red box), well above the current wage growth.

Real wages (after inflation), bottom panel above, should turn negative, meaning inflation rises more than wages, further dividing the K-shaped economy. pic.twitter.com/NleGTkuWaD

— Jim Bianco (@biancoresearch) May 10, 2026

4/12
What does negative real wages mean?

The top panel is the University of Michigan Consumer Sentiment Index. The red part of the line shows when real wages are negative (bottom panel, same as the chart above).

When real wages go negative, consumer sentiment gets crushed. pic.twitter.com/jmJm1qSObH

— Jim Bianco (@biancoresearch) May 10, 2026

5/12

Note that consumer sentiment is already at a 74-year low. pic.twitter.com/joJYIn3MkZ

— Jim Bianco (@biancoresearch) May 10, 2026

6/12

Trump's overall approval rating (black) and his approval ratings on various issues (colored lines). This is an average of all political polls compiled by RealClearPolitics.

Notice the green line, Trump's approval rating on inflation (aka "affordability") is imploding. pic.twitter.com/CMj9r4UV8Z

— Jim Bianco (@biancoresearch) May 10, 2026

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7/12

Prices have the public so upset that consumer sentiment, as measured by the University of Michigan, is approaching nearly a one-century low.

Why now? Since the end of COVID, the cumulative increase in prices (blue) is outpacing their paycheck (orange). pic.twitter.com/oeuJnAG55s

— Jim Bianco (@biancoresearch) May 10, 2026

8/12

53% likely have no assets (no stocks and rent), so they are not benefiting from the rise in asset prices (booming stocks and soaring home prices).

They have to make ends meet with their paycheck alone, and they cannot.https://t.co/0Mpew7mVIa

— Jim Bianco (@biancoresearch) May 10, 2026

When economic flood waters rise, there are those who can go to safety behind investments and assets and those who cannot. 

9/12

By the way, the opposite was true from 2009 to 2020, paychecks (orange) outpaced CPI/prices (blue). So those without assets could at least "hold serve." pic.twitter.com/bes4qZv7UG

— Jim Bianco (@biancoresearch) May 10, 2026

As a general rule, income and wages should be growing at a quicker step than price increases in a healthy economy.

10/12

What does this mean for markets? Nothing and everything.

Nothing. None of this will impact the rally in assets.

Everything. Ds are leading the generic ballot by almost 6% (bottom panel).

Public unhappiness with prices (aka "affordability") is driving this. pic.twitter.com/NOWCHnyzTQ

— Jim Bianco (@biancoresearch) May 10, 2026

11/12

And if you listen to the Ds, they have an answer to high prices: they are going to take your stock/crypto profits away from you via taxes.

Take them seriously.https://t.co/tU836YMIVR

— Jim Bianco (@biancoresearch) May 10, 2026

They shall not be questioned. They act as if they have all of the answers.

12/12

For the Rs to have a chance, they need this chart to collapse before the midterm elections.

But you don't need to be a Chartered Market Technician to see that this chart is doing the opposite of collapsing ... it continues to go vertical. pic.twitter.com/jegb4D9ZB6

— Jim Bianco (@biancoresearch) May 10, 2026

Make of that what you will.

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