Real wages still slipping, you tired of all the winning yet?

With the middle of the month hitting us, it was time to release the US Consumer Price Index Report. That CPI report showed that we had relatively tame inflation last month after a notable increase in September.

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1 percent in October on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 2.0 percent.

Also noteworthy is that the real wages report came out at the same time as the inflation report, as it usually does, since CPI gives the second part of information that is required to complete that statistic (the first comes from average hourly wage info in the monthly jobs report).

And even with very little inflation, the 1-cent-an-hour drop in average hourly wages in the October jobs report meant that American workers fell behind last month.

Real average hourly earnings for all employees decreased 0.1 percent from September to October,seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from no change in average hourly earnings combined with a 0.1-percent increase in the Consumer Price Index for All Urban Consumers (CPI-U). Real average weekly earnings decreased 0.1 percent over the month due to the decrease in real average hourly earnings combined with no change in the average workweek.

Widening it out for the last year, the real wages report shows that nothing’s really changed on the wage front, except that inflation is a little higher now than it was a year ago, so the minor wage increase workers may be seeing isn’t going as far.

12 month change
Oct 2016
Avg hourly earnings +2.7%
Real avg hourly earnings +1.1%

Oct 2017
Avg hourly earnings +2.4%
Real avg hourly earnings +0.4%

And the recent trend isn’t going the right way either, as real average hourly wages have declined for each of the last 3 months.

Real avg hourly wages, Aug-Oct 2017
Aug 2017 -0.3%
Sept 2017 -0.1%
Oct 2017 -0.1%

That’s the first time we’ve been going the wrong way in this stat since the end of 2016 and January 2017, when real wage growth was at 0% or less for 5 out of 6 months. That stagnation is apparently what led blue-collar whites to say they wanted to see change under Donald Trump (if you believe what they tell reporters in those many “rural white guy in the Midwest” stories). So how do you think they feel with wages declining again in late 2017?

An even bigger concern for me is that the October 2017 CPI report had gasoline declining by -2.4% after a post-hurricane spike in September, and real wages still went down. We know that gas prices have gone back up in the next month, so that would seem to indicate CPI should be higher again for November, and that means wages have to go up higher next month, or else we have a 4th straight month of declining wages.

And tell me what is going to change under GOP control in either DC or Madison that would turn these real wages back up? Absolutely nothing, and in fact these guys want to keep workers desperate enough that wages do NOT go up for their corporate contributors. Our economy will not hit the next level until people actually see a benefit from their work to allow them to consume more without going into debt, and the recent decline in real wages is an ominous sign.