November 3, 2023

Average  hourly earnings rose 0.2% in October to $34.00 after climbing 0.3% in September.   Despite higher inflation and higher interest rates firms across-the-board continue to scramble to find additional bodies. However, the prospect of a recession sometime in the not-too-far-distant future is making them behave just a bit more cautiously.  Earnings growth has slowed slightly from 5.5% at the beginning of  last year to 4.1% currently.

But these hourly earnings data may understate the growth in wages.  The Atlanta Fed’s wage tracker has risen 5.2% in the past year compared to a 4.1% increase in the officially-published hourly earnings data.

But the problem is that while nominal earnings have risen 4.1%, inflation has risen almost as quickly and real or inflation-adjusted earnings have risen only 0.5% in that same period of time.  Workers and unions have noticed that their real earnings have not risen much which is going to keep the pressure on employers for sizable wage gains in the months ahead.

Average weekly earnings fell 0.1% in October to $1,166.20 after having risen 0.3% in September.  In the past year weekly earnings have risen 3.2%.

Stephen Slifer


Charleston, SC