CEAVerified account

For our friends @BLS_gov. @torynewmayr may also appreciate.

Real wages (taking inflation into account) are also growing. We can see this by using the PCE price index to account for inflation instead of CPI. The most recent available data for PCE in July show real wage growth of 2.3% year-over-year.

Workers are taking home more money in their pockets. In August, average hourly earnings rose by 2.9 percent over the past 12 months, which is the largest nominal 12-month wage increase in almost 10 years (since 2009).

The unemployment rate held steady at 3.9 percent in August. This marks only the 9th time since 1970 that the unemployment rate has been below 4.0 percent. Almost half of those (four times) occurred this year.

In 2018 (including the August new #s) the economy has averaged 207k jobs per month – exceeding the average monthly jobs growth of the last two years: 2016 (195k) and 2017 (182k)

201k new jobs created in August. The longest consecutive positive jobs streak is continuing *deep* into the recovery. #JobsReport #BLSdata

Some confusion among economists about how wage measures relate to labor market performance. So, here is a pop quiz:

Today @BLS_gov confirmed that productivity growth is strong. Productivity growth is essential for growth in incomes, wages, and living standards http://go.usa.gov/vrn  #Productivity #BLSdataBLS

The reverse is happening now, as these workers are coming back into the workforce: it is artificially lowering the headline real wage growth, which is why we think there’s a need to rethink what measures we use.

Chart shows why decomposition is important: headline real wage growth was over 4% in the height of the recession. Nobody thinks wages really went up then. What happened? The least productive workers were being laid off ... the remaining workers were more productive/higher paid.