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August 10, 2018 | Real Wages Decline Year-Over-Year

Mike 'Mish' Shedlock

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
Wages are not keeping up with consumer price inflation. The average worker is worse off than a year ago.

In conjunction with the CPI report, the BLS also releases a Report on Real Earnings.

All employees

  • Real average hourly earnings for all employees were unchanged from June to July, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from a 0.3-percent increase in average hourly earnings combined with a 0.2-percent increase in the Consumer Price Index for All Urban Consumers (CPI-U).
  • Real average weekly earnings decreased 0.2 percent over the month due to no change in real average hourly earnings combined with a 0.3-percent decrease in the average workweek.

Real Hourly Earnings All Employees, Month-Over-Month Change

Production and Nonsupervisory Employees

  • Real average hourly earnings for production and nonsupervisory employees decreased 0.1 percent from June to July, seasonally adjusted. This result stems from a 0.1-percent increase in average hourly earnings combined with a 0.1-percent increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
  • After combining the change in real average hourly earnings with no change in average weekly hours, real average weekly earnings were unchanged over the month.

Real Hourly Earnings Production and Nonsupervisory Workers, Month-Over-Month Change

Year-Over Year

  • All Workers: From July 2017 to July 2018, Real average hourly earnings decreased 0.2 percent, seasonally adjusted. Combining the change in real average hourly earnings with the 0.3-percent increase in the average workweek resulted in a 0.1-percent increase in real average weekly earnings over this period.
  • Production and Nonsupervisory: From July 2017 to July 2018, real average hourly earnings decreased 0.4 percent, seasonally adjusted. Combining the change in real average hourly earnings with a 0.3-percent increase in the average workweek resulted in a 0.1-percent decrease in real average weekly earnings over this period.

Congratulations Not in Order

Production and supervisory workers are working longer hours and taking home less pay in real terms.

Bear in mind these are averages. Pay raises are skewed to the top employees. The median worker is even worse off.

Thank the Fed.

Want to buy a starter home? Forget about it.

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Mike “Mish” Shedlock

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August 10th, 2018

Posted In: Mish Talk

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