Real Earnings Have Gone Nowhere For a Full Year

Mish

Real hourly wages have risen but average hours worked fell. The combination leaves the average worker no better off.

Last week the BLS reported on Real Earnings for January 2020.

All Employees

  • Real average hourly earnings for all employees increased 0.1 percent from December to January, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from an increase of 0.2 percent in average hourly earnings combined with an increase of 0.1 percent in the Consumer Price Index for All Urban Consumers (CPI-U).
  • Real average hourly earnings increased 0.6 percent, seasonally adjusted, from January 2019 to January 2020. The change in real average hourly earnings combined with a 0.6-percent decrease in the average workweek resulted in essentially no change in real average weekly earnings over this period.

Production and Nonsupervisory Employees

  • Real average hourly earnings for production and nonsupervisory employees were unchanged from December to January, seasonally adjusted. This result stems from a 0.1-percent increase in average hourly earnings combined with an increase of 0.1 percent in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
  • From January 2019 to January 2020, real average hourly earnings increased 0.7 percent, seasonally adjusted. The change in real average hourly earnings combined with a 0.6-percent decrease in the average workweek resulted in a 0.1-percent increase in real average weekly earnings over this period.​

Greatest Ever

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Hip Hip Hooray!

  1. On an hourly basis both groups are doing better than a year ago assuming of course you believe the CPI.
  2. Although all employees are doing no better in terms of take home pay, I am pleased to report production and supervisory workers are doing 0.1% better than a year ago, again assuming you believe the CPI.
  3. And there is the added benefit of making the same for working 0.6% fewer hours, assuming one really did work fewer hours as opposed to not getting paid for hours worked.

Those of you who question the CPI have the right idea. For discussion, please see BLS Reports Tame Inflation as Medical Costs Soar Out of Sight.

For those of you who believe the CPI and really did work fewer hours for an extra 0.1% I have to ask: Is the the Greatest Economy Ever™ or what?

Mike "Mish" Shedlock

Comments (7)
No. 1-7
Tony Bennett
Tony Bennett

"Is the the Greatest Economy Ever™"

...

Fueled in large measure by debt. LOTS of it.

St Louis Fred's latest all sector debt had it increasing ~ $2.5 trillion ... in the first 3 quarters of 2019.

The choking noise the economy will make will be when debt mules can no longer Roll It and delinquencies / defaults surge.

Till then, the economy will continue its drunken stagger ... just looking for an oncoming car ... or cliff.

abend237-04
abend237-04

@Tony Bennett A place to fall apart is my personal favorite metaphor for the times. I feel much better that it's sung by the guy Pavarotti called, "The best tenor in North America" versus just some hack on the FOMC.

Bam_Man
Bam_Man

But their stocks, bitcoin and gold have appreciated enough to more than make up for it. Oh, wait....

Stuki
Stuki

How "real" earnings are "going", depends entirely on how one chooses to arbitrarily count "real." I have no doubt they have "gone up" almost every year, in both North Korea and North America.

bradw2k
bradw2k

Bond yields minus inflation (admitting that that is not one single thing) tell the real story. There is no overall growth in the one thing that matters: capital.

LoneRanger73
LoneRanger73

The CPI is a lie of Orwellian proportions. Real wages have been in a 40-year fall.


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