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Real Hourly Wages Rise For 2nd Month But Reduced Hours Eat Most of the Gain

Real hourly wages rose 0.2 percent in August. That's only the third time in 20 months.
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Real (Inflation Adjusted Wages) data from BLS, calculations by FRED, chart by Mish

Real (Inflation Adjusted Wages) data from BLS, calculations by FRED, chart by Mish

My numbers slightly differ from BLS (+-0.1).  For example, the BLS has the rise last month as 0.6 and September of 2021 as 0.20. 

Since August of 2021 we both calculate only three positive months. We both calculate six positive months for production and nonsupervisory workers. Most months we arrive at the same number.

Fred Calculation For July 2022 

St. Louis Fed (FRED) Calculation of Real Average Hourly Earnings (All Employees)

St. Louis Fed (FRED) Calculation of Real Average Hourly Earnings (All Employees)

  • Mish (Via Fred): Real Average Hourly Earnings Percent Change = Average Earnings Percent Change Minus CPI Percent Change = 0.50 Percent Rounded
  • BLS: 0.60 Percent

Please consider the BLS Real Earnings Report for August 2022.

All Employees

  • Real average hourly earnings for all employees increased 0.2 percent from July to August, seasonally adjusted.
  • This result stems from an increase of 0.3 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 weekly earnings decreased 0.1 percent over the month due to the change in real average hourly earnings combined with a 0.3-percent decrease in the average workweek

Production and Nonsupervisory Workers

  • Real average hourly earnings for production and nonsupervisory employees increased 0.3 percent from July to August, seasonally adjusted. 
  • This result stems from a 0.4-percent increase in average hourly earnings combined with no change to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
  • Real average weekly earnings increased 0.1 percent over the month due to the change in real average hourly earnings being combined with a decrease of 0.3 percent to the average workweek.
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For all employees, the decline in the workweek ate over 100% of the wage increase. Production and nonsupervisory workers came out slightly ahead. 

Year-Over-Year Real Wages

  • From August 2021 to August 2022, real average hourly earnings decreased 2.4 percent, seasonally adjusted. 
  • The change in real average hourly earnings combined with a 0.9-percent decrease in the average workweek resulted in a 3.2-percent decrease in real average weekly earnings over this period.  

Year-over-year employees continue to lose vs. inflation.

For more on the CPI, please see Stocks Hammered as CPI Rises a Mere 0.1 Percent More Than Expected.

Also note Food Prices Surge Again in August, What's in Your Basket?

This post originated on MishTalk.Com.

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