October’s consumer inflation reading came in at a surprisingly high +0.4%, which as shown in red in the graph below, was one of the 3 highest in the past two years. Meanwhile average hourly earnings increased less than +0.2% – the second lowest reading in the past two years, shown in blue:
As a result, real average hourly earnings decreased -0.2% last month, the worst reading since late 2017:
In a longer term perspective, this means that real wages declined to 97.6% of their all time high in January 1973:
On a YoY basis, real average wages remained up +1.7%, as they have been since June, and still below their recent peak growth of 1.9% YoY in February:
Aggregate hours and payrolls have improved significantly since July, so even though they declined -0.1% in October, real aggregate wages – the total amount of real pay taken home by the middle and working classes – are up 30.1% from their October 2009 trough at the beginning of this expansion:
For total wage growth, this expansion remains in third place, behind the 1960s and 1990s, among all post-World War 2 expansions; while the *pace* of wage growth has been the slowest except for the 2000s expansion.