Labor Productivity Up, Real Hourly Compensation Down
Mike Mish Shedlock
Here's a Tweet this morning that caught my attention, along with my response.
I suspect the comment from Sven was sarcastic, but I am not positive.
Inquiring minds may be wondering how real wages are doing. Today's report from the BLS on Productivity and Costs sheds some light.
Congratulations nonfarm business workers. On average, you made 0.2% more than you did a year ago. Of course, that assumes you believe the BLS CPI inflation stats.
If you worked in nondurable manufacturing, oops. You were down 2.4% from last quarter and 1.5% from a year ago.
Fourth Quarter 2017 Stats
In the fourth quarter it was a clean sweep. Workers lost money no matter where they worked despite rising productivity.
If one believes the BLS understates the CPI, the numbers are even worse.
Bear in mind these numbers are averages and averages make things look far better than they really are. A small percentage of workers getting big raises skew the numbers.
Median wages, only available on a 1.5 to 2.0 year lag, tell the real story. The last data on real median wages is from May of 2016.
Real median wages declined in seven out of the last eleven years!
For discussion, please see How the Fed's Inflation Policies Crucify Workers in Pictures.
Lawrence Yun, the National Association or Realtors' (NAR) chief economist, Blames Inventory, Weather as Pending Home Sales Tumble 3% Year-Over-Year.
The above charts tell the real story: Consumers are tapped out and wages are not keeping up with expenses.
Amusingly, economists wonder why consumer spending is weakening.
Mike "Mish" Shedlock