Real Wages Are Negative Year-Over-Year For Six Consecutive Months

Inflation is chewing up wage gains, and then some.

Hourly earnings and real hourly earnings year-over-year

Nominal wages are purportedly up about three percent from a year ago, but it’s a mirage.

For six months, inflation-adjusted wages have been negative.

Real Hourly Earnings Year-Over-Year

April Total Private: -0.20, April Production: -0.20
May Total Private: -0.80, May Production: -0.77
June Total Private: -0.08, June Production: -0.04
July Total Private: -0.09 July Production: -0.05
August Total Private: -0.23, August Production: -0.15
September Total Private: -0.67, September Production: -0.58

Real and Nominal Hourly Earnings Percent Change Month-Over-Month

For two consecutive months and five out of the last seven, real wages are down month-over month.

These numbers are based off the CPI.

The Fed’s preferred measure of inflation is the Personal Consumption Expenditures (PCE) price index, but wages are down vs the PCE as well. Year-over-year PCE has been 3.4 percent or higher since March.

PCE stats are only through August. Its report lag a few weeks.

CPI and PCE Are Both Understated

Neither measure counts property taxes, homeowner’s insurance, or home prices.
Food is understated because of improper weights.
Medical insurance costs are ridiculously calculated based on retained earnings, not consumer prices.

Yet, economists wonder why people are more upset about inflation than what the numbers show.