What You May Not Know About the Money You Make

With the unemployment rate hovering at 6%, many have happily proclaimed the American economy has officially rebounded from the depths of the great recession. But a simple chart reveals the country still has a long way to go.

Aug 16, 2014 at 11:30AM

Unemployment is falling, and job openings are rising. But one chart reveals just how much further the U.S. economy has to go before it truly recovers.

The big rebound
After the Bureau of Labor Statistics released its data surrounding employment in the U.S. in July last week, The Wall Street Journal reported the encouraging reality that, "July marked the first time since 1997 that employers have added 200,000 or more jobs for six consecutive months."

While the unemployment rate ticked up ever so slightly from 6.1% in June to 6.2% in July, many noted this was more a function of more Americans actively looking for job. And a glance at how significantly unemployment has fallen since the peak of unemployment shows just how much progress has been made:

Unemployment Rate Since July

Source: Bureau of Labor Statistics.

Yet it doesn't stop there, as just this week the Department of Labor revealed job opening stood at 4.8 million, the highest level since February 2001. And there are now an additional 850,000 open jobs compared to this time last year.

With the economy adding more than 200,000 jobs in July, job openings standing at their highest levels in more than 13.5 years, and unemployment continuing to dip, at first glance, seemingly things couldn't be going any better for the United States economy.

But one chart reveals while much progress has been made, the U.S. still has a long way to go before improvement is truly reached.

The sobering reminder
PayScale, a company which tracks compensation data for companies across the U.S., reveals since 2006 real wages -- which factors in inflation -- has fallen by more than 8%:

Payscale Real Wage Index National Us By Quarter

Source: PayScale Real Wage Index.

It notes despite the fact surface level wages have grown by nearly 7.5% over that time, as a result of inflation -- the rising cost of the things we buy -- what Americans are actually getting paid on a comparable basis has fallen by nearly 8%.

As the company itself says, "in other words, the income for a typical worker today buys them less than it did in 2006."

In its last release PayScale noted:

Some measures experienced great wage growth (e.g., IT jobs, Oil & Gas industry, and Oil & Gas hot spots like Houston, etc.), while others had a significant fall over the year (e.g., the Miami, Legal jobs, and the Arts, Entertainment & Recreation industry, etc.)

Yet ultimately, the biggest takeaway was that even while things are improving in some areas, the fact remains the broader earnings of Americans employed in the private sector have discouragingly fallen as a result of the last economic crisis, and have stayed there ever since.

The key takeaway
At times many individuals, including myself, can see numbers like the ones first mentioned and think that all has recovered since the depths of the financial crisis five and a half years ago. But the data offered by PayScale reveals how much recovery still must be had for the U.S. to return to its levels before the financial crisis.

I would agree with Warren Buffett who said this year he's "always considered a "bet" on ever-rising U.S. prosperity to be very close to a sure thing."

But numbers like this reveal there is still much to be done before we truly recover from the financial crisis.And one can only hope it comes sooner rather than later.

Warren Buffett: This new technology is a "real threat"
Speaking of Warren Buffett, at his company's recent meeting, he admitted this emerging technology is threatening his biggest cash-cow. While Buffett shakes in his billionaire-boots, only a few investors are embracing this new market which experts say will be worth over $2 trillion. Find out how you can cash in on this technology before the crowd catches on, by jumping onto one company that could get you the biggest piece of the action. Click here to access a FREE investor alert on the company we're calling the "brains behind" the technology.

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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