Private workers make 5.11 percent more per hour than they did a year ago. That is not close to keeping up with the pace of inflation.

Production and nonsupervisory wages, nominal and deflated by the CPI index. Chart by Mish.
 

Hourly Earnings and Real Hourly Earnings 

• Wages appears to be spiraling out of control (top 2 lines blue and red), but appearances deceive.
• Real (CPI-adjusted) wages have gone nowhere for decades.
• Production and nonsupervisory workers made $9.38 per hour in CPI-adjusted dollars in 1973. Today they make $9.42 per hour.
   

Nominal Wages Year-Over-Year Percent Change

Nominal wage data from BLS, chart by Mish
 

Hooray?

• Production and nonsupervisory workers are making 6.35 percent more per hour than they did a year ago.
• All workers are making 5.11 percent more per hour than they did a year ago.

Things don't look so good when you factor in inflation running a hot 9.1 percent more than a year ago.
 

Real Wages Year-Over-Year Percent Change

Production and nonsupervisory wages percent change year-over-year. Chart by Mish.
 

Workers Currently Losing to Inflation

For 15 consecutive months dating to April 2021, workers have had big wage hikes but those hikes have not kept pace with inflation.

Q: What happened in April 2021?
A: The third and largest by far free-money free money stimulus package by President Biden. 

People immediately when on a huge goods buying spree that neither manufacturers nor supply chains were prepared for.

The trend of no wage gains goes back much further. 

Production and supervisory workers make only four cents more per hour in real terms than February 1973!
 

Free Money Stimulus Checks and the CPI

CPI data from BLS, PCE data from BEA, chart by Mish

For discussion of the CPI, please see Consumer Price Index Jumps Another 1.3 Percent, Much More Than Than Expected
 

Recession is Here and Housing Will Lead

For discussion of the recession and the impact durable goods and housing play, please see A Big Housing Bust is the Key to Understanding This Recession

Also, see Expect Huge Negative Revisions to New Home Sales as Sales Crash and Orders Cancelled

The Fed aims to cool inflation and they will. The result will be like trying to slice a tomato with a hammer. 

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