Real Average Hourly Wages and Real Total Payrolls for October

– by a New Deal Democrat

With yesterday’s October CPI report, we can increase two of my favorite measures of how the working/middle class is doing – real average unsupervised wages and real aggregate wages.

Real average wages for nonsupervisory workers decreased -0.1% for the month. They are -5% below their pandemic lockdown peak (which, remember, was hit by more lower-wage workers being laid off) and -2.6% lower than they were last September :

Real aggregate wages measure how much wealth the middle/working class earns as a whole. Over the past 60 years, when this has fallen outright on an annual basis, it has always – without exception – coincided, give a month or two, with the onset of recession:

The news here was good. Really, really lukewarm, but still good.

Real aggregate wages were unchanged for the month and remained +1.1% higher year-on-year:

Both inflation and nominal wage growth have slowed over the past few months. To signal an impending recession, nominal wage growth would have to slow significantly more than inflation. That he hasn’t done that much in the last few months is at least muted good news.

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