Real Earnings
Coupled with the BLS release of the CPI is the Real Earnings Report.
- Real average hourly earnings for all employees increased 0.4 percent from July to August, seasonally adjusted. This result stems from an increase of 0.6 percent in average hourly earnings combined with an increase of 0.3 percent in the Consumer Price Index for All Urban Consumers (CPI-U).
- Real average weekly earnings increased 0.3 percent over the month due to the change in real average hourly earnings combined with no change in the average workweek.
The lead chart says what you need to know. Factoring in the CVPI, inflation-adjusted wages have stagnated since 1973.
Inflation Takes a Big Bite Out of the Apple
The Real Earnings data accompanies the CPI.
The numbers are even worse than they look because they do not factor in actual housing prices and medical costs paid on behalf of consumers (think Medicare and corporate plans).
In retrospect, inflation did just not take a bite out of the earnings apple, it at the whole thing, and then some for anyone looking to buy a home.
For discussion, please see CPI Rises Less Than Expected But Year-Over-Year Numbers Remain Elevated
Factoring in housing, my last report had year-over-year CPI at 8.57%. For discussion, please see Housing Adjusted Real Interest Rates Sink to a Record Low -8.5 Percent.
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Mish
I always laughed when someone told me to look at the stock market as a symbol of the most amazing economy ever. With the endless printing of dollars the past dozen plus years, it doesn’t take a genius to figure it takes more money to buy stock. The housing boom is the same. People are so excited their houses jumped in value tens of thousands of dollars almost magically overnight. Yet, when you sell your house, you aren’t going to get any real upgrade from the money you got from your old house unless you sink a lot more money into the house.People clearly aren’t thinking. The inflation is here just like the smart economist predicted when this endless easing cycle began.
It’s important to note that this data means that the average American worker is most definitely worse off than in 1973.I’m tired of the old argument that jobs used to pay more and you only needed one income earner to pay the bills.That’s totally untrue. IF you adopted the lifestyle of a 1973 worker you’d be better of than a 1973 worker (barely).What has happened is lifestyle creep. People live in bigger houses, have more stuff than ever and eat better food. Life is much much better today than in 1973, thanks to Capitalism.So thank you Capitalism!
I do have a smartphone (15 a month with Republic Wireless) that gets me all the data, calls and texts I want. I also take a very nice vacation, paid for my Chase points every year, so totally free.
century, growing at a compound annual rate of about 2.6 percent per year. At the same time, the CAGR for wages has
risen by only 0.6 percent.
And yet, if the wages are raised even a few percent, McD’s , WalMart and other big employers will come crashing down??!! Mmmmkayyy! LOL