This morning I noted Another Wild Jobs Report: Payroll Employment Rose a Disappointing 20,000.

The month-over-month jump in hourly earnings are worth a closer inspection.

Hours and Wages

Average weekly hours of all private employees fell 0.1 hour to 34.4 hours. Average weekly hours of all private service-providing employees was flat at 33.3 hours. Average weekly hours of manufacturers fell 0.1 hours to 40.7 hours.

Average Hourly Earnings of All Nonfarm Workers rose $0.11 to $27.66. That a 0.51% gain. Average hourly earnings of private service-providing employees rose $0.11 to $27.43, a gain of 0.40%. Average hourly earnings of manufacturers rose $0.12 to $27.38, a gain of 0.44%.

Average hourly earnings of Production and Supervisory Workersrose $0.08 to $23.18. That's a 0.35% gain. Average hourly earnings of private service-providing employees rose $0.10 to $22.92, a gain of 0.44%. Average hourly earnings of manufacturers rose $0.06 to $21.90, a gain of 0.27%

Year-Over-Year Wage Growth

  • All Private Nonfarm from $26.75 to $27.66, a gain of 3.4%
  • All production and supervisory from $22.40 to $23.18, a gain of 3.5%.

Monthly swings can be wide, so it's best to look at trends in year-over-year growth, as the lead-chart does. Here is a closer look.

Year-Over-Year Wage Growth vs CPI 2013-2019

Image placeholder title

Starting August 2018, the year-over-year hourly earnings growth has been over 3% every month but October 2018. That's 6 out of seven months.

Phillips Curve

The Phillips Curve clowns will no doubt be singing ah ha! See!

Dismiss the thought. The Phillips Curve is random. It appears to work about 50% of the time. That makes it useless.

Opinion 1: Inflation

Opinion 2: Inflation

Opinion 3: Inflation

Opinion 4: Stagflation

Opinion 5: Benign

Opinion 6: Mine

I don't know, and they don't either.

I could not produce the charts of Lakshman Achuthan in Fred. But whether or not his charts are meaningful, I think Achuthan is on the right track.

Asset bubble bursting events are deflationary. The demographic cycle is deflationary. The global slowdown, especially in China and Europe is deflationary. The huge jump in retail store closings is deflationary. The auto and housing trends are deflationary.

Finally, Trump's tax cut stimulus is about over already. Some of these wage gains are related.

If one believes we are late cycle and a recession is coming bet on Achuthan.

Mike "Mish" Shedlock

Productivity Up 2.9% - Real Hourly Earnings Down: Thank You Fed!

Productivity for the second quarter rose 2.9%. Year-over-year inflation-adjusted hourly earnings are down.

Real Hourly Earnings Decrease 0.1%, Real Weekly Earnings Drop 0.4%, Hooray!

As a result of a rising CPI real hourly earnings are down 0.1% for the month. Coupled with shrinking work hours, real weekly earnings declined 0.4% for the month.

Real Hourly Earnings: Assuming You Believe the CPI

In the past year, real wages rose eight months, fell once, and were flat three times.

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.

Real Hourly Earnings Scorecards: Employees Making Way Less Than 9 Months Ago

Hourly wages, in real terms, have been on the decline for nine months.

Hooray! Your Real Earnings Declined in August

The BLS Real Earnings Report for August shows your average earnings decreased 0.3% for the month due to a rise in the CPI coupled with no wage gains.

Mapping All the Jobs Created in the Recovery by Hourly Wage

On Friday, the BLS updated hourly wages and jobs information. Let's backtrack to the start of the recovery for details.

Congratulations Workers! You Make a Penny More Per Hour Than Last Month

The average worker makes a penny more per hour than last month in real terms. The year-over-year gain is precisely zero.

Five Things to Watch in Earnings Season

Earnings will generally be miserable, but with a some exceptions. What else can we expect?