Thursday, April 12, 2018

Real average hourly and aggregate earnings: March 2018 update

 - by New Deal democrat

Here's a look at two more labor market measures, now that we have the inflation data for March as well.

First, here is real average hourly earnings for ordinary workers, normed to 100 as of its peak last July:

With -0.1% deflation for the month, and +0.1% nominal growth, there was a little improvement, but we are still -0.6% below the peak over half a year ago.

We are less than +0.1% better than one year ago, and truth be told, there hasn't been any significant improvement at all in over two years.

Second, here is real aggregate payrolls:

This tells us how much more income is flowing to workers as a whole in the expansion, by accounting for changes in hours worked and growth in the number of persons employed.

Real aggregate payrolls have still been growing, albeit at a slower pace in the last two years and in particular since last July.

Basically the economy is going to continue to be OK so long as consumers continue to buy new houses and purchase other durables like vehicles. Since 2016 they've gone into savings to do so. Meanwhile consumer credit standards generally have been slowly tightening:

although standards for GSE mortgage loans remain loose:

Due to a glitch, the last several quarters aren't shown on the FRED graph, but as of Q1 they remained a loose -8.3.

Next week we'll start to get the March data on housing.