CPI vs Hourly Earnings Chart Notes
- The blue line is year-over-year gains or losses in average private hourly earnings.
- The green line is year-over-year gains or losses in average private hourly earnings of production and nonsupervisory workers.
- The BLS calculates two measures of inflation pertinent to the above chart. The first is called CPI-U (red line) or CPI for all urban consumers. The second is CPI-W (yellow line) for urban clerical workers.
- All data is not seasonally adjusted as is typical for year-over-year comparisons.
Statistical Mirage
Wages jumped in the first few month of the Covid pandemic because proportionally far more lower paid employees were laid off.
Restaurant and hotel workers, etc., were heavily laid off in the pandemic vs higher paid employees who could work from homes.
Wages did not really jump in this period via pay increases. Rather, wages rose because more low-wage employees lost their jobs.
Real Hourly Earnings
Real Hourly Earnings Chart Notes
- Real means inflation-adjusted.
- Real hourly private wages are calculated by subtracting year-over-year CPI-U from year-over-year private wages.
- Real hourly production and nonsupervisory wages are calculated by subtracting year-over-year CPI-W from year-over-year production and nonsupervisory wages.
Real wages for all workers as well as production and nonsupervisory workers have been negative for 21 months starting April of 2021.
Related Articles
- CPI Declines Due to Gasoline But Food and Shelter Costs Jump Again
- Food Prices Rise Again, a Bit Slower, What’s in Your Basket?
How Long Will High Inflation Persist?
It’s not where we are that matters most but where we are headed. For discussion, please see How Long Will High Inflation Persist? What Happened to the Great Moderation?
This post originated on MishTalk.Com.
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Treasury-Federal Reserve collaboration like in 2020-2022 didn’t previously exist after the 1951 Treasury-Federal Reserve Accord, because whenever in the past the FED’s responsibilities were
subordinate to the Treasury’s, this country experienced intolerable rates of
inflation.
expropriation.”
interest compounds to the point that it can no longer be paid out of the
current revenues. Once the interest itself is debt financed, the compounding
accelerates.
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Pritchard (Ph.D. Chicago, Economics 1933, M.S. Statistics Syracuse, Phi Beta
Kappa) “Inflation: The Ill-Defined Economic Bogeyman”
essential to the maintenance of a continuous flow of products to the primary
consumer markets.”
It is much more desirable to
promote prosperity by inducing a smooth and continuous flow of monetary
savings, income not spent, into real investment, than to rely, as we have done
c. 1965, on a vast expansion of bank credit with accompanying inflation to
stimulate production.