U.S. Paychecks Grow at Record-Slow Pace

[Recursion]

http://www.nytimes.com/aponline/2015/07/31/us/politics/ap-us-employments-costs.html?_r=0

U.S. wages and benefits grew in the spring at the slowest pace in 33 years, stark evidence that stronger hiring isn't lifting paychecks much for most Americans. The slowdown also likely reflects a sharp drop-off in bonus and incentive pay for some workers.

The employment cost index rose just 0.2 percent in the April-June quarter after a 0.7 increase in the first quarter, the Labor Department said Friday. The index tracks wages, salaries and benefits. Wages and salaries alone also rose 0.2 percent.

...

In some occupations where bonuses are common, compensation fell sharply after spiking in the first quarter. Those include sales, professional services such as law and accounting, and management.

...

Yet another measure of pay, compiled by the Federal Reserve Bank of Atlanta, shows wages are accelerating. Hourly pay for a typical employee rose 3.2 percent in June from 12 months earlier, according to the Atlanta Fed. While that is double the annual pace of 1.6 percent in February 2010, it is still below the pre-recession levels of about 4 percent.

[progree]

1. And the ECI is up 2.0% over the past 12 months while inflation up only 0.2%

It's not surprising that we have a recent slowdown in compensation growth, given that the Consumer Price Index has been basically flat over the past 12 months ( +0.2% )
http://data.bls.gov/timeseries/CUSR0000SA0

While the Employment Cost Index is up 2.0% over the past 12 months. Which translates to an inflation-adjusted increase of about 1.8% (2.0 - 0.2 = 1.8).

Also, in the past year, the INFLATION ADJUSTED Weekly Earnings of Production and Non-Supervisory Workers is up 2.2%

Real Weekly (i.e. adjusted for inflation) - http://data.bls.gov/timeseries/CES0500000031
Nominal Weekly (i.e. not adjusted for inflation) - http://data.bls.gov/timeseries/CES0500000030

And better than under G.W. Bush. And better than under Clinton even.
The below graph is the INFLATION ADJUSTED Weekly Earnings of Production and Non-Supervisory Workers through June 2015

I didn't see anyone making a big hoo hah 3 months ago when it was reported that compensation in the 1st quarter rose 0.7% (which is about a 2.8% annual rate -- against a backdrop of near zero inflation).

[Recursion]

2. Nobody wants to say "deflation"

But it looks like we may be at or near it.

[progree]

3. It might just be commodities going down and just about everything else going up...

From rents to haircuts, Americans start to feel price hikes, AP, August 1, 2015
http://bigstory.ap.org/article/42f265847f0440b6a961a25ff02735b3/rents-haircuts-americans-start-feel-price-hikes

Inflation as measured by the consumer price index has barely risen in the past 12 months, mostly because cheaper gas has held down the index.

But prices are rising. If you exclude food and energy, which tend to fluctuate sharply, "core" inflation has risen 2.3 percent at an annual rate in the past three months {1.8% over the past 12 months -Progree}.

{Core CPI: http://data.bls.gov/timeseries/CUSR0000SA0L1E&output_view=pct_1mth
BLS's CPI news release: http://www.bls.gov/news.release/cpi.nr0.htm -Progree}

The biggest driver of inflation this year has been residential rents. They climbed 3.5 percent in June from a year earlier, ...

The prices of restaurant meals are also rising more quickly, picking up 3 percent in June from 12 months earlier....

Economists expect the price increases to continue, in part because they're occurring mostly in services, whose prices tend to be comparatively stable. Economists call these "sticky" prices. ... The Federal Reserve Bank of Atlanta maintains an index of sticky prices, which has risen 3 percent at an annual rate in the past three months,

[Romulox]

5. Um, wage stagnation and "deflation" aren't the same thing. Any evidence for the latter?

I mean, we have the biggest asset bubble of all time going here...

[Recursion]

6. Sure, this quarter's CPI is at about -0.1%

If that's not deflation, I'm not sure what is.

[progree]

7. I get +0.9% over the last 3 months (about 3.6% annualized) in the CPI-U

CPI-U, Seasonally Adjusted: http://data.bls.gov/timeseries/CUSR0000SA0&output_view=pct_1mth

[font face = "courier new"]
1-Month Percent Change
Series Id: CUSR0000SA0
Seasonally Adjusted
Area: U.S. city average
Item: All items

1-month percent changes (not annualized -- to annualize, multiply by 12)
` ` ` Jan Feb Mar Apr May Jun Jul Aug. Sep Oct. Nov Dec
2014: 0.2 0.1 0.2 0.2 0.3 0.2 0.1 -0.1 0.1 0.1 -0.3 -0.3
2015: -0.7 0.2 0.2 0.1 0.4 0.3

=======================================================

3-Month Percent Change
Series Id: CUSR0000SA0
Seasonally Adjusted
Area: U.S. city average
Item: All items

3-month percent changes (not annualized -- to annualize, multiply by 4)
` ` ` Jan Feb Mar Apr May Jun Jul Aug Sep Oct. Nov Dec
2014: 0.5 0.6 0.5 0.5 0.7 0.7 0.6 0.2 0.1 0.1 -0.1 -0.6
2015: -1.3 -0.8 -0.2 0.6 0.8 0.9
[/font]

[Romulox]

8. Just seems odd that I'd hear about it from you, before anybody else. Do your numbers check out?

I think you need to provide a cite.

[Romulox]

4. But all those people making less (relative to expenses) should SPEND SPEND SPEND! nt

[Omaha Steve]

9. K&R!