Every month, I report on hourly earnings in my jobs report. I start from my prior month as my template. Let's compare the most recent two reports, one from today (for December) the other from December 6 (for November).

Two Most Recent Jobs Reports

In November I commented "Average hourly earnings of Production and Supervisory Workers rose $0.07 to $23.83. That's a 0.29% gain."

This month, I noticed "Average hourly earnings of Production and Supervisory Workers rose $0.02 to $23.79. That's a 0.08% gain. Oops. It looks like we had a little revision here. Last month I reported wages rose $0.07 to $23.83."

Year-Over-Year Wage Growth As Calculated for November

  • All Private Nonfarm rose from $27.43 to $28.29, a gain of 3.1%.
  • All production and supervisory rose from $22.99 to $23.83, a gain of 3.7%.
    Year-Over-Year Wage Growth As Calculated for December
  • All Private Nonfarm rose from $27.53 to $28.32, a gain of 2.9%.
  • Production and supervisory rose from $23.09 to $23.79, a gain of 3.0%.

Poof

70 basis points of year-over-year wage growth vanished for production and supervisory workers from November to December due to negative revisions in Oct and Nov.

Let's investigate further.

Production Worker Reported Wage Growth in November

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Production Worker Reported Wage Growth in December

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Revisions

  • The BLS revised October from $23.76 to $23.73.
  • The BLS revised November from $23.83 to $23.77

Using $23.83 as the base, wages for production and supervisory workers fell by $0.02 in December. This, plus the October revision (and possibly some other revisions) accounts for the huge year-over-year difference.

There were smaller changes for all workers, but also negative.

All Worker Reported Wage Growth in November

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All Worker Reported Wage Growth in December

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The BLS revised October lower but the impact was not as visible.

Phillips Curve Revisited

Last month the Phillips Curve advocates were out in force over the wage increases.

The Phillips Curve, a discredited economic model developed by A. W. Phillips, purports that inflation and unemployment have a stable and inverse relationship.

On August 29, 2017 I noted that a Fed Study Shows Phillips Curve Is Useless. Yet, economists keep trying.

On January 15, 2019 I noted Yet Another Fed Study Concludes Phillips Curve is Nonsense.

But many Fed presidents and former Fed Chair Janet Yellen are believers. In March of 2107 Yellen proclaimed "The Phillips Curve is Alive“.

Of course, the Fed is clueless about what inflation really is, and how to measure it.

Mike "Mish" Shedlock

Real Wages Decline in December, Barely Up From Year Ago

Real wages for production workers fell 0.2% in Dec. Real wages for all employees fell 0.1%. Both barely up from yr ago.

Jobs Report: Payroll Miss +164K, Nonfarm Wage Growth Anemic +0.1%

The BLS reports April jobs as +164K with the unemployment rate falling to 3.9%. Revisions were positive, wages anemic.

Productivity Growth Poised to Recover? Will Workers Benefit?

A McKinsey study addresses the "productivity puzzle". However, there is no puzzle and there never was a puzzle.

Investigating the Mystery of Weak Wage Growth

The Wall Street Journal proposes "Reluctance to Switch Jobs" explains wages. But the Atlanta Fed Macroblog says, nope.

Job Growth +224,000 Tops Expectations, Wage Growth Disappoints

Jobs growth beat expectations of 165,000 but wage growth underperformed, rising 0.2% vs an expected 0.3%.

Congratulations Workers! You Make One Penny More Than a Year Ago

Real wages for production and nonsupervisory workers are up precisely one penny per hour from January of 2017.

Real Earnings Have Gone Nowhere For a Full Year

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

Real Hourly Earnings Decline YoY for Production Workers, Flat for All Employees

Today's CPI report that shows inflation rose only 0.1%. Real wages are not keeping up even with that.

Fallacy of Wage Growth and a Housing "Shortage" in Pictures

The WSJ says there is a "historic shortage of homes". That's nonsense, but sales are depressed. Why? Real wages explain.