Image Source: Pixabay
 

Let’s compare what the BLS and Department of Labor say to reality.
 

PCE is the BLS Personal Consumption Expenditures price index, the Fed’s preferred measure of inflation.

In nominal terms, the four-year gain in wages is 23.4 percent. In real (inflation-adjusted) terms, it’s a gain of 4.6 percent.

As I explain below, that gain is imaginary. And people know that even if economists don’t.

QCEW Wages

QCEW stands for Quarterly Census of Employment and Wages

The Quarterly Census of Employment and Wages (QCEW) program publishes a quarterly count of employment and wages reported by employers covering more than 95 percent of U.S. jobs, available at the county, MSA, state and national levels by industry.

The QCEW consists of 12.2 million establishments in the first quarter of 2024.

QCEW is 95 percent coverage of jobs. The Nonfarm payroll report surveys ~629,000 establishments with a response rate of 42.6 percent as of March 2025.

Thus, QCEW is a less timely but far more accurate representation of the labor market than the monthly nonfarm payroll jobs report.

The spotlight on this post is wages.

New QCEW Data

Today the Department of Labor released Quarterly Census of Employment and Wages for the first quarter of 2025.

The data is not seasonally adjusted but it could be and should be.

QCEW Real Wages Percent Change from Year Ago
 

Compared to 2024 Q1 real weekly wages are up 1.56 percent and total wages are up 2.18 percent.

The difference is in the number of people working.

How Wrong is the BLS on Real Wages?

The short answer is very. The alleged 4.6 percent rise in real wages is not only anemic, it’s imaginary.

The BLS is wrong in its calculation of housing expenses and meals. I have discussed both recently.

The BLS gives food at home a much higher percentage of the CPI than food away from home but the UDSA says the opposite. The USDA includes tax and tips, the BLS doesn’t.

The BLS PCE price index does not include the price of housing (only rent). Nor does it include property taxes, or homeowners’ insurance (only content insurance).

Is Homeowners Insurance Understated in the CPI? Shop Around!

On August 11, asked Is Homeowners Insurance Understated in the CPI? Shop Around!

If you own a home, what percent of your income is spent on your homeowners’ insurance? Under 1/2 of 1 percent?

Not Counted

The BLS does not include insurance in the CPI [or PCE] as the average person understands insurance.

Nor does the BLS include property taxes or home prices directly.

Also on August 11, 2025, I noted Over Half the US Has Major Stress Over the Price of Food

Are you stressed out over food?

For more on the BLS food weights vs the USDA, please see my August 12, 2025 post Where Do You Spend Money on Food? How Screwed Up Are the BLS Weights?

Does the BLS match your budget?

Actual vs Predicted Consumer Sentiment Is a Big Hoot

To tie everything together please see my September 8, 2025 post Actual vs Predicted Consumer Sentiment Is a Big Hoot

Economists think people should be happy. They aren’t.

Economists think people should be happier because like the Fed, they are clueless about inflation.

Real wages are down over the last four years no matter what the economists think and the BLS says.

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