Real wages decline YoY, while real aggregate payrolls grow

Real wages decline YoY, while real aggregate payrolls grow

With the consumer price report this morning, let’s conclude this weeklong focus on jobs and wages by updating real average and aggregate wages.

Through July 2018, consumer prices are up 2.9% YoY, while wages for non-managerial workers are up 2.7%. Thus real wages have actually declined YoY:

In the longer view, real wages have actually been flat for nearly 2 1/2 years:

Because employment and hours have increased, however, real *aggregate* wage growth has continued to increase:

Real aggregate wages — the total earned by the American working and middle class — are now up 25.8% from their October 2009 bottom.

Finally, because consumer spending tends to slightly lead employment, let’s compare YoY growth in real retail sales, measured quarterly (red), with that in real aggregate payrolls (blue):

Here’s the monthly close-up on the last 10 years:

Since late last year real retail sales growth has accelerated YoY, so we should expect the recent string of good employment reports to continue for at least a few more months.

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