Real wages unchanged, real money supply increases in October

Real wages unchanged, real money supply increases in October

With October consumer price inflation reported, let’s update a few metrics.

First of all, while the YoY% growth in real wages increased:

real wages were unchanged month over month, as both nominal wages and consumer inflation both increased by +0.3%:




Real wages have still not even increased 1% in the last 2 1/2 years.

Because, as I noted yesterday, so much of consumer inflation, and therefore real wages, depends on gas prices, and oil prices have been – well – crashing for the past several weeks:

we are likely to see a further decrease in inflation, so consumer purchasing power should increase.

Another measure worth updating for business cycle purposes is real M1, which rose to a new high in October:

as the nominal increase in M1 surpassed inflation handily.

Growth in real M1 had been decelerating, and was on the cusp of turning negative throughout the summer. ┬áBut in the last two months it has rebounded. This is a good lesson in not simply projecting the trend in leading indicators forward — because we never know when that trend may change.