With the release of the CPI report earlier this week, I can update several measures of average middle-class American income.

Real average hourly wages increased by 0.2% in June, and are up 1.6% from one year ago:

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Real aggregate payrolls for the entire spectrum of nonsupervisory American workers increased  0.3% in June and are up 3.1% from one year ago:

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This is an excellent coincident marker of an expanding economy vs. recession. It tells us that, mainly thanks to declining gas price since June 2022, average American workers and their households have had a significant increase in their ability to buy things. A very good positive sign.

Finally, one last note about various measures of inflation. A few commentators highlighted the still-high +5.9% YoY increase in “sticking price” inflation. But as shown below, the 1 month and 3 month average changes in even that metric have declined sharply, to close to the Fed’s target range:

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By any reasonable measure, inflation is no longer a major problem.

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