|
☕ DrinkCoffeeAndProfit
Smart money moves before breakfast
|
|
Inspiration Quote for the Day
“Whatever you have, spend less.”
Samuel Johnson
|
|
|
The Morning Ritual
Hank Got a Three Percent Raise. The Grocery Store Got a Bigger One.
|
Hank, a buddy from my old bowling league, called me Tuesday sounding pleased. His shop gave everybody a raise. Three percent, starting this month. He read me the letter twice, standing in his driveway with the garage door up.
Then he asked the question I was hoping he would skip. “So I’m ahead, right?” I told him to hold that thought until 8:30 this morning. That is when the September jobs report lands. The line that answers Hank sits near the bottom of it.
|
|
· · · Partner Message · · ·
The ticker is TLT… and Larry Benedict says it just became more important than ever.
The Federal Reserve’s recent hike could send it moving fast, and Larry plans to trade it in an unusual way that could double your money…
This is an advertisement.
|
|
|
In One Sip
► The September jobs report lands at `8:30` a.m. Eastern. Forecasters expect about `95,000` new jobs and unemployment steady at `4.1%`. Source: FactSet via Morningstar.
► In August, average hourly pay rose `3.1%` from a year earlier, to `$37.75`. Source: Bureau of Labor Statistics.
► The PCE price index rose `3.4%` over the same year. That is the inflation gauge the Fed watches most. Source: Commerce Department.
► Adjusted for prices, average hourly pay fell -`0.3%` over the year. Pay beat inflation from May 2023 through March 2026. Then it fell behind. Source: BLS Real Earnings.
► The buried part: over the last three months, pay grew at a `2.8%` yearly pace. The gap is getting wider. Source: First Trust, from BLS data.
|
|
|
Why It Matters for Your Money
Put that raise on a `$60,000` salary. At `3.1%`, you get about `$1,860` more a year.
Now the other side of the ledger. With prices up `3.4%`, you need about `$2,040` more just to buy the same groceries, gas and insurance.
That leaves you -`$180` a year. Hank got a raise and a pay cut in the same letter.
Run it at the newer `2.8%` pace. The shortfall doubles to about `$360`.
Sound familiar? The raise shows up once, on the pay stub. The cut shows up every week at the register, a few dollars at a time, where you never add it up.
|
|
|
· · · Partner Message · · ·
Every dollar in your bank is an entry in a ledger and a claim on an institution. That works fine right up until it does not. Priority Gold’s free Wealth Preservation Guide looks at what history says about moments when those claims came under pressure, and shows three simple steps for holding part of your retirement directly.
This is an advertisement.
|
|
|
The Wealth Angle
I think the payroll number is the wrong thing to watch this morning. Traders will chase it for ten minutes. Your household runs on the line underneath it.
Here is the pattern. When pay trails prices, people who own things pull ahead of people who earn things. A house, a stock fund, a gold coin. Their price floats up with everything else.
A paycheck gets repriced once a year. By your boss.
Think about that for a second. For most of us, the biggest asset we have is the one that never reprices on its own.
One more wrinkle. Part of Wednesday’s softer inflation reading came from a change in how the Commerce Department computes several pieces of the index. The checkout line at the grocery store changed nothing.
Owners reprice daily. Earners reprice yearly. Plan around the slower clock.
|
|
|
☕ Key Insight:
Wages rose `3.1%`. Prices rose `3.4%`. Until your raise beats the second number, it is a pay cut on nicer letterhead.
|
|
|
Coffee Break Move
Before your second cup, do Hank’s math on your own pay. Take your last raise. Subtract `3.4`. What is left is your real raise.
If you are comfortable: if your review comes up before year-end, walk in with that number written down. A raise below the price line is a cut. You can say so politely, with the receipt to back it.
If you are stretched: pick one bill that renews on autopilot, like car insurance or a phone plan. Get one competing quote this week. Clawing back `$180` closes Hank’s gap in a single phone call.
Hank called back last night. He is still glad about the raise. He just stopped calling it a raise.
|
|
