Real average wages / real aggregate payrollsReal average wages and real aggregate payrolls for

by a New Deal Democrat

, and total payroll for non-supervisory workers. It’s the best way, based on monthly data, to see how average Americans are doing financially.

While unsupervised average wages rose 0.2% in January, consumer inflation increased more, by 0.5%, meaning real average hourly wages fell -0.3%. They are down -2.1% since December 2020:

Real average wages / real aggregate payrolls

Much of the decline in real wages was due to a large increase in gas prices in the first half of 2022.

If real hourly wages fell, this was offset by a strong increase in the number of jobs held. As a result, nominal aggregate wages have increased by 22.8% since December 2020:

Adjusted for inflation, total wages for non-supervisory workers still rose 7.1%:

Real average wages / real aggregate payrolls

In the past, when unsupervised real aggregate wages have not risen for a year, this has been a reliable signal of a recession—which makes perfect sense, since if the financial situation of most working Americans is stagnant, they are likely to rein in spending. if not actually decreasing. With the significant upward revisions to non-farm payrolls for 2022, as can be seen above, this situation has improved and real aggregate wages have risen to almost 3% year-on-year as of January:

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