CMP Associates Regulation Blog

Thirty-Eight Million Unemployed or Underemployed in the Lost Economic Cycle of the Global Recession with Economic Growth Underperforming Below Trend Worldwide, Unemployment Rate at 10.2 Percent in Jul 2020 In the Global Recession, with Output in the US Reaching a High in Feb 2020 (https://www.nber.org/cycles.html), in the Lockdown of Economic Activity in the COVID-19 Event, Creation of 1.763 Million Nonfarm Payroll Jobs and 1.462 Million Private Payroll Jobs in Jul 2020, Cyclically Stagnating Real Wages, Job Creation, Cyclically Stagnating Real Disposable Income Per Capita, Financial Repression, World Cyclical Slow Growth, and Government Intervention in Globalization: Part III

Carlos M. Pelaez

I Thirty-Eight Million Unemployed or Underemployed in the Lost Economic Cycle of the Global Recession with Economic Growth Underperforming Below Trend Worldwide

IA2 Number of People in Job Stress

IA3 Long-term and Cyclical Comparison of Employment

IA4 Job Creation

IB Stagnating Real Wages

II Stagnating Real Disposable Income and Consumption Expenditures

IIB1 Stagnating Real Disposable Income and Consumption Expenditures

IB2 Financial Repression

III World Financial Turbulence

IV Global Inflation

V World Economic Slowdown

VA United States

VB Japan

VC China

VD Euro Area

VE Germany

VF France

VG Italy

VH United Kingdom

VI Valuation of Risk Financial Assets

VII Economic Indicators

VIII Interest Rates

IX Conclusion

References

Appendixes

Appendix I The Great Inflation

IIIB Appendix on Safe Haven Currencies

IIIC Appendix on Fiscal Compact

IIID Appendix on European Central Bank Large Scale Lender of Last Resort

IIIG Appendix on Deficit Financing of Growth and the Debt Crisis

http://cmpassocregulationblog.blogspot.com/2014/02/mediocre-cyclical-united-states.html and earlier http://cmpassocregulationblog.blogspot.com/2013/12/collapse-of-united-states-dynamism-of.html http://cmpassocregulationblog.blogspot.com/2013/11/global-financial-risk-mediocre-united.html http://cmpassocregulationblog.blogspot.com/2013/09/mediocre-and-decelerating-united-states.html

http://cmpassocregulationblog.blogspot.com/2013/09/increasing-interest-rate-risk.html http://cmpassocregulationblog.blogspot.com/2013/08/risks-of-steepening-yield-curve-and.html http://cmpassocregulationblog.blogspot.com/2013/06/tapering-quantitative-easing-policy-and.html

http://cmpassocregulationblog.blogspot.com/2013/06/mediocre-united-states-economic-growth.html

http://cmpassocregulationblog.blogspot.com/2013/04/mediocre-and-decelerating-united-states.html http://cmpassocregulationblog.blogspot.com/2013/03/mediocre-gdp-growth-at-16-to-20-percent.html http://cmpassocregulationblog.blogspot.com/2012/12/mediocre-and-decelerating-united-states_24.html http://cmpassocregulationblog.blogspot.com/2012/12/mediocre-and-decelerating-united-states.html http://cmpassocregulationblog.blogspot.com/2012/09/historically-sharper-recoveries-from.html http://cmpassocregulationblog.blogspot.com/2012/09/collapse-of-united-states-dynamism-of.html http://cmpassocregulationblog.blogspot.com/2012/07/recovery-without-jobs-stagnating-real.html http://cmpassocregulationblog.blogspot.com/2012/06/mediocre-recovery-without-jobs.html http://cmpassocregulationblog.blogspot.com/2012/04/mediocre-growth-with-high-unemployment.html http://cmpassocregulationblog.blogspot.com/2012/04/mediocre-economic-growth-falling-real.html http://cmpassocregulationblog.blogspot.com/2012/03/mediocre-economic-growth-flattening.html http://cmpassocregulationblog.blogspot.com/2012/01/mediocre-economic-growth-financial.html http://cmpassocregulationblog.blogspot.com/2011/12/slow-growth-falling-real-disposable.html http://cmpassocregulationblog.blogspot.com/2011/11/us-growth-standstill-falling-real.html http://cmpassocregulationblog.blogspot.com/2011/10/slow-growth-driven-by-reducing-savings.html). Average hourly earnings seasonally adjusted increased 0.2 percent from $29.32 in Jun 2020 to $29.39 in Jul 2020. The Bureau of Labor Statistics states (https://www.bls.gov/cps/employment-situation-covid19-faq-june-2020.pdf https://www.bls.gov/covid19/employment-situation-covid19-faq-july-2020.htm): “Similarly, changes in average hourly earnings in recent months must be interpreted with caution. Average hourly earnings of all employees on private nonfarm payrolls declined by 35 cents in June to $29.37, following a decrease of 31 cents in May and a gain of $1.34 in April. The increase in average hourly earnings in April largely reflects the disproportionate number of lower-paid workers who went off payrolls, which put upward pressure on the total private average hourly earnings estimate. Some of these workers returned to payrolls in May and June, and job gains among lower-paid workers put downward pressure on average hourly earnings, though the effect is more muted given the smaller magnitude of employment changes in the past 2 months.” Average private weekly earnings increased $51.84 from $962.12 in Jul 2019 to $1,013.96 in Jul 2019 or 5.4 percent and decreased $0.51 from $1,014.47 in Jun 2020 to $1,013.96 in Jul 2020 or minus 0.1 percent. The Bureau of Labor Statistics analyzes the increase in earnings (https://www.bls.gov/cps/employment-situation-covid19-faq-june-2020.pdf https://www.bls.gov/covid19/employment-situation-covid19-faq-july-2020.htm): “Similarly, changes in average hourly earnings in recent months must be interpreted with caution. Average hourly earnings of all employees on private nonfarm payrolls declined by 35 cents in June to $29.37, following a decrease of 31 cents in May and a gain of $1.34 in April. The increase in average hourly earnings in April largely reflects the disproportionate number of lower-paid workers who went off payrolls, which put upward pressure on the total private average hourly earnings estimate. Some of these workers returned to payrolls in May and June, and job gains among lower-paid workers put downward pressure on average hourly earnings, though the effect is more muted given the smaller magnitude of employment changes in the past 2 months.” The inflation-adjusted wage bill can only be calculated for Jun, which is the most recent month for which there are estimates of the consumer price index. Earnings per hour (not-seasonally-adjusted (NSA) rose from $27.90 in Jun 2019 to $29.08 in Jun 2020 or by 4.2 percent (https://www.bls.gov/data/); see Table IB-3 below). Data NSA are more suitable for comparison over a year. Average weekly hours NSA were 34.9 in

Jun 2019 and 34.6 in Jun 2020 (https://www.bls.gov/data/; see Table IB-2 below). The wage bill increased 3.3 percent in the 12 months ending in Jun 2020:

{[(wage bill in Jun 2020)/(wage bill in Jun 2019)]-1}100 =

{[($29.08x34.6)/($27.90x34.9)]-1]}100

= {[($1006.17)/($973.71]-1}100 = 3.3%

CPI inflation was 0.6 percent in the 12 months ending in Jun 2020 (https://www.bls.gov/cpi/) for an inflation-adjusted wage-bill change of percent: {[(1.033/0.994)-1]100 = 2.7%} (see Table IB-5 below for Jun 2020 with minor rounding difference). The wage bill for Jul 2020 before inflation adjustment increased 5.5 percent relative to the wage bill for Jul 2019:

{[(wage bill in Jul 2020)/(wage bill in Jul 2019)]-1}100 =

{[($29.23x34.5)/($27.87x34.3)]-1]}100

= {[($1008.44)/($955.94)]-1}100 = 5.5%

Average hourly earnings increased 4.9 percent from Jul 2019 to Jul 2020 {[($29.23/$27.87) – 1]100 = 4.9%} while hours worked increased 0.6 percent {[(34.5/34.3) – 1]100 = 0.6%}. The increase of the wage bill is the product of the increase of hourly earnings of 4.9 percent and decrease of hours worked of 0.6 percent {[(1.049x1.006)-1]100 = 5.5%} with small rounding error. The Bureau of Labor Statistics states (https://www.bls.gov/cps/employment-situation-covid19-faq-june-2020.pdf https://www.bls.gov/covid19/employment-situation-covid19-faq-july-2020.htm): “Similarly, changes in average hourly earnings in recent months must be interpreted with caution. Average hourly earnings of all employees on private nonfarm payrolls declined by 35 cents in June to $29.37, following a decrease of 31 cents in May and a gain of $1.34 in April. The increase in average hourly earnings in April largely reflects the disproportionate number of lower-paid workers who went off payrolls, which put upward pressure on the total private average hourly earnings estimate. Some of these workers returned to payrolls in May and June, and job gains among lower-paid workers put downward pressure on average hourly earnings, though the effect is more muted given the smaller magnitude of employment changes in the past 2 months.” Energy and food price increases are similar to a “silent tax” that is highly regressive, harming the most those with lowest incomes. There are concerns that the wage bill would deteriorate in purchasing power because of renewed raw materials shocks in the form of increases in prices of commodities such as the 31.1 percent steady increase in the DJ-UBS Commodity Index from Jul 2, 2010 to Sep 2, 2011. The charts of four commodity price indexes by Bloomberg show steady increase since Jul 2, 2010 that was interrupted briefly only in Nov 2010 with the sovereign issues in Europe triggered by Ireland; in Mar 2011 by the earthquake and tsunami in Japan; and in the beginning of May 2011 by the decline in oil prices and sovereign risk difficulties in Europe (http://www.bloomberg.com/markets/commodities/futures/). Renewed risk aversion because of the sovereign risks in Europe had reduced the rate of increase of the DJ UBS commodity index to 10.2 percent on May 2, 2014, relative to Jul 2, 2010 (see Table VI-4) but there has been a shift in investor preferences into equities. Inflation has been rising in waves with carry trades driven by zero interest rates to commodity futures during periods of risk appetite with interruptions during risk aversion (https://cmpassocregulationblog.blogspot.com/2020/07/contraction-of-household-wealth-by-14.html). Inflation-adjusted wages fall sharply during carry trades from zero interest rates to long positions in commodity futures during periods of risk appetite.

Table IB-1, US, Earnings per Hour and Average Weekly Hours SA

Earnings per Hour	Jul 2019	May 2020	Jun 2020	Jul 2020
Total Private	$28.05	$29.70	$29.32	$29.39
Goods Producing	$29.05	$30.15	$29.94	$30.07
Service Providing	$27.81	$29.60	$29.18	$29.2
Average Weekly Earnings
Total Private	$962.12	$1,030.59	$1,014.47	$1,013.96
Goods Producing	$1,164.91	$1,172.84	$1,170.65	$1,187.77
Service Providing	$923.29	$1,000.48	$980.45	$978.87
Average Weekly Hours
Total Private	34.3	34.7	34.6	34.5
Goods Producing	40.1	38.9	39.1	39.5
Service Providing	33.2	33.8	33.6	33.5

Source: US Bureau of Labor Statistics

https://www.bls.gov/

Calculations of inflation-adjusted average hourly earnings by the BLS are in Table IB-4. Average hourly earnings rose above inflation throughout the first nine months of 2007 just before the global recession that began in the final quarter of 2007 when average hourly earnings began to lose to inflation. In contrast, average hourly earnings of all US workers have risen less than inflation in four months in 2010 and in all but the first month in 2011 and the loss accelerated at 1.8 percent in Sep 2011, declining to a real loss of 1.1 percent in Feb 2012 and 0.6 percent in Mar 2012. There was a gain of 0.5 percent in Apr 2012 in inflation-adjusted average hourly earnings but another fall of 0.6 percent in May 2012 followed by increases of 0.3 percent in Jun and 1.0 percent in Jul 2012. Real hourly earnings stagnated in the 12 months ending in Aug 2012 with increase of only 0.2 percent and increased 0.7 percent in the 12 months ending in Sep 2012. Real hourly earnings fell 1.3 percent in Oct 2012 and gained 1.1 percent in Dec 2012 but declined 0.2 percent in Jan 2013 and stagnated at change of 0.1 percent in Feb 2013. Real hourly earnings increased 0.5 percent in the 12 months ending in Mar 2013 and 0.3 percent in Apr 2013, increasing 0.6 percent in May 2013. In Jun 2013, real hourly earnings increased 1.0 percent relative to Jun 2012. Real hourly earnings fell 0.6 percent in the 12 months ending in Jul 2013 and increased 0.7 percent in the 12 months ending in Aug 2013. Real hourly earnings increased 1.3 percent in the 12 months ending in Oct 2013 and 1.0 percent in Nov 2013. Real hourly earnings increased 0.4 percent in the 12 months ending in Dec 2013. Real hourly earnings increased 0.4 percent in the 12 months ending in Jan 2014 and 1.7 percent in the 12 months ending in Feb 2014. Real hourly earnings increased 1.2 percent in the 12 months ending in Mar 2014. Real hourly changed 0.0 percent in the 12 months ending in Apr 2014. Real hourly changed 0.0 percent in the 12 months ending in May 2014. Real hourly earnings increased 0.1 percent in the 12 months ending in Jun 2014. Real hourly earnings increased 0.1 percent in the 12 months ending in Jul 2014 and increased 0.5 percent in the 12 months ending in Aug 2014. Real hourly earnings fell 0.3 percent in the 12 months ending in Sep 2014 and increased 0.4 percent in the 12 months ending in Oct 2014. Real hourly earnings increased 1.5 percent in the 12 months ending in Nov 2014 and 0.4 percent in the 12 months ending in Dec 2014. Real hourly earnings increased 2.2 percent in the 12 months ending in Jan 2015 and increased 1.9 percent in the 12 months ending in Feb 2015. Real hourly earnings increased 2.3 percent in the 12 months ending in Mar 2015 and increased 2.4 percent in the 12 months ending in Apr 2015. Real hourly earnings increased 2.4 percent in the 12 months ending in May 2015 and 1.3 percent in the 12 months ending in Jun 2015. Real hourly earnings increased 2.0 percent in the 12 months ending in Jul 2015 and increased 2.7 percent in the 12 months ending in Aug 2015. Real hourly earnings increased 2.3 percent in the 12 months ending in Sep 2015. Real hourly earnings increased 2.3 percent in the 12 months ending in Oct 2015 and increased 1.9 percent in the 12 months ending in Nov 2015. Average hourly earnings increased 1.7 percent in the 12 months ending in Dec 2015 and increased 1.1 percent in the 12 months ending in Jan 2016. Real hourly earnings increased 0.7 percent in the 12 months ending in Feb 2016 and increased 0.9 percent in the 12 months ending in Mar 2016. Real hourly earnings increased 1.5 percent in the 12 months ending in Apr 2016 and increased 2.2 percent in the 12 months ending in May 2016. Real hourly earnings increased 1.5 percent in the 12 months ending in Jun 2016 and increased 2.0 percent in the 12 months ending in Jul 2016. Real hourly earnings increased 0.9 percent in the 12 months ending in Aug 2016 and increased 1.2 percent in the 12 months ending in Sep 2016. Real hourly earnings increased 1.8 percent in the 12 months ending in Oct 2016 and increased 0.2 percent in the 12 months ending in Nov 2016. Real hourly earnings increased 0.7 percent in the 12 months ending in Dec 2016 and increased 0.7 percent in the 12 months ending in Jan 2017.

Real hourly earnings decreased 0.1 percent in the 12 months ending in Feb 2017 and increased 0.2 percent in the 12 months ending in Mar 2017. Real hourly earnings increased 0.9 percent in the 12 months ending in Apr 2017 and decreased 0.1 percent in the 12 months ending in May 2017. Real hourly earnings increased 0.9 percent in the 12 months ending in Jun 2017 and increased 1.4 percent in the 12 months ending in Jul 2017. Real hourly earnings increased 0.7 percent in the 12 months ending in Aug 2017 and increased 0.6 percent in the 12 months ending in Sep 2017. Real hourly earnings increased 0.3 percent in the 12 months ending in Oct 2017 and increased 0.2 percent in the 12 months ending in Nov 2017. Real hourly earnings increased 0.6 percent in the 12 months ending in Dec 2017. Real hourly earnings increased 0.1 percent in the 12 months ending in Jan 2018 and increased 0.4 percent in the 12 months ending in Feb 2018. Real hourly earnings increased 0.5 percent in the 12 months ending in Mar 2018 and increased 0.4 percent in the 12 months ending in Apr 2018. Real hourly earnings increased 0.1 percent in the 12 months ending in May 2018 and changed 0.0 percent in the 12 months ending in Jun 2018. Real hourly earnings decreased 0.1 percent in the 12 months ending in Jul 2018 and increased 0.5 percent in the 12 months ending in Aug 2018. Real hourly earnings increased 1.4 percent in the 12 months ending in Sep 2018 and changed 0.1 percent in the 12 months ending in Oct 2018. Real hourly earnings increased 1.1 percent in the 12 months ending in Nov 2018 and increased 2.2 percent in the 12 months ending in Dec 2018. Real hourly earnings increased 1.6 percent in the 12 months ending in Jan 2019 and increased 1.9 percent in the 12 months ending in Feb 2019. Real hourly earnings increased 1.5 percent in the 12 months ending in Mar 2019 and increased 0.6 percent in the 12 months ending in Apr 2019. Real hourly earnings increased 1.5 percent in the 12 months ending in May 2019 and increased 2.4 percent in the 12 months ending in Jun 2019. Real hourly earnings increased 1.0 percent in the 12 months ending in Jul 2019 and increased 1.7 percent in the 12 months ending in Aug 2019. Real hourly earnings increased 1.4 percent in the 12 months ending in Sep 2019 and increased 1.4 percent in the 12 months ending in Oct 2019. Real hourly earnings increased 1.3 percent in the 12 months ending in Nov 2019 and increased 0.6 percent in the 12 months ending in Dec 2019. Real hourly earnings increased 0.5 percent in the 12 months ending in Jan 2020. Real hourly earnings increased 1.4 percent in the 12 months ending in Feb 2020. Real hourly earnings increased 2.4 percent in the 12 months ending in Mar 2020. Real hourly earnings increased 7.6 percent in the 12 months ending in Apr 2020. Real hourly earnings increased 6.5 percent in the 12 months ending in May 2020. Real hourly earnings increased 3.6 percent in the 12 months ending in Jun 2020. The Bureau of Labor Statistics states (https://www.bls.gov/cps/employment-situation-covid19-faq-may-2020.pdf https://www.bls.gov/covid19/employment-situation-covid19-faq-july-2020.htm): “Similarly, estimates of average hourly earnings for May must be interpreted with caution. Average hourly earnings of all employees on private nonfarm payrolls declined by 29 cents in May to $29.75, following a gain of $1.35 in April. The increase in average hourly earnings in April largely reflects the disproportionate number of lower-paid workers who went off payrolls, which put upward pressure on the total private average hourly earnings estimate. Some of these workers returned to payrolls in May, and job gains among lower-paid workers put downward pressure on average hourly earnings, though the effect is more muted given the smaller magnitude of the employment change. The large changes in employment in recent months make it difficult to discern longer-term trends in the hours and earnings measures.” The economic welfare or wellbeing of United States workers deteriorated in a recovery without hiring (https://cmpassocregulationblog.blogspot.com/2020/07/collapse-of-united-states-dynamism-of.html and earlier https://cmpassocregulationblog.blogspot.com/2020/06/global-recession-with-output-in-us.html), stagnating/declining real wages and 38.5 million unemployed or underemployed (Section I and earlier https://cmpassocregulationblog.blogspot.com/2020/07/increase-of-total-nonfarm-payroll-jobs.html) because of mediocre economic growth (https://cmpassocregulationblog.blogspot.com/2020/08/contraction-of-united-states-gdp-at-32_57.html and earlier https://cmpassocregulationblog.blogspot.com/2020/06/mediocre-cyclical-united-states.html). The BLS is revising the data from 2006 to 2009 (https://www.bls.gov/ces/#notices) now available in the release for Jan 2016 and subsequent releases.

Table IB-4, US, Average Hourly Earnings of All Employees NSA in Constant Dollars of 1982-1984

Year	Mar	Apr	May	Jun	Dec
2006	10.05	10.10	9.91	9.88	10.21
2007	10.10	10.16	9.99	9.97	10.14
2008	10.08	9.98	9.88	9.82	10.45
2009	10.45	10.38	10.31	10.18	10.36
2010	10.33	10.33	10.36	10.25	10.38
2011	10.25	10.21	10.21	10.11	10.28
2012	10.19	10.26	10.15	10.14	10.39
∆%12M	-0.6	0.5	-0.6	0.3	1.1
2013	10.24	10.29	10.21	10.24	10.43
∆%12M	0.5	0.3	0.6	1.0	0.4
2014	10.36	10.29	10.21	10.25	10.47
∆%12M	1.2	0.0	0.0	0.1	0.4
2015	10.60	10.54	10.46	10.38	10.65
∆%12M	2.3	2.4	2.4	1.3	1.7
2016	10.70	10.70	10.69	10.54	10.72
∆%12M	0.9	1.5	2.2	1.5	0.7
2017	10.72	10.80	10.68	10.63	10.78
∆%12M	0.2	0.9	-0.1	0.9	0.6
2018	10.77	10.84	10.69	10.63	11.02
∆%12M	0.5	0.4	0.1	0.0	2.2
2019	10.93	10.90	10.85	10.89	11.09
∆%12M	1.5	0.6	1.5	2.4	0.6
2020	11.19	11.73	11.55	11.28
∆%12M	2.4	7.6	6.5	3.6

Source: US Bureau of Labor Statistics

https://www.bls.gov/

Chart IB-2 of the US Bureau of Labor Statistics plots average hourly earnings of all US employees in constant 1982-1984 dollars with evident decline from annual earnings of $10.33 in 2009 and $10.35 in 2010 to $10.24 in 2011 and $10.23 in 2012 or loss of 1.0 percent (data in https://www.bls.gov/data/). Annual real hourly earnings increased 0.5 percent in 2013 relative to 2012 and increased 0.5 percent in 2014 relative to 2013. Annual real hourly earnings increased 2.1 percent in 2015 relative to 2014. Annual real hourly earnings increased 1.2 percent in 2016 relative to 2015. Annual real hourly earnings increased 0.6 percent in 2017. Annual hourly earnings increased 0.6 percent in 2018. Annual hourly earnings increased 1.4 percent in 2019. Annual real hourly earnings increased 8.5 percent from 2007 to 2019 at the rate of 0.7 percent per year. Annual real hourly earnings increased 6.0 percent from 2009 to 2019 at the rate of 0.6 percent per year and increased 9.4 percent from 2008 to 2019 at the rate of 0.8 percent per year. Real hourly earnings of US workers are crawling in a fractured labor market. The economic welfare or wellbeing of United States workers deteriorated in a recovery without hiring (https://cmpassocregulationblog.blogspot.com/2020/07/collapse-of-united-states-dynamism-of.html and earlier https://cmpassocregulationblog.blogspot.com/2020/06/global-recession-with-output-in-us.html), stagnating/declining real wages and 41.3 million unemployed or underemployed (Section I and earlier https://cmpassocregulationblog.blogspot.com/2020/07/increase-of-total-nonfarm-payroll-jobs.html) because of mediocre economic growth (https://cmpassocregulationblog.blogspot.com/2020/08/contraction-of-united-states-gdp-at-32_57.html and earlier https://cmpassocregulationblog.blogspot.com/2020/06/mediocre-cyclical-united-states.html). The BLS is revising the data from 2006 to 2009 (http://www.bls.gov/ces/#notices) now available for the release of Jan 2016 and subsequent releases.

Chart IB-2, US, Average Hourly Earnings of All Employees in Constant Dollars of 1982-1984, SA 2006-2020

Source: US Bureau of Labor Statistics https://www.bls.gov/data

Chart IB-3 provides 12-month percentage changes of average hourly earnings of all employees in constant dollars of 1982-1984, that is, adjusted for inflation. There was sharp contraction of inflation-adjusted average hourly earnings of US employees during parts of 2007 and 2008. Rates of change in 12 months became positive in parts of 2009 and 2010 but then became negative again in 2011 and into 2012 with temporary increase in Apr 2012 that was reversed in May with another gain in Jun and Jul 2012 followed by stagnation in Aug 2012. There was marginal gain in Sep 2012 with sharp decline in Oct 2012, stagnation in Nov 2012, increase in Dec 2012 and renewed decrease in Jan 2013 with near stagnation in Feb 2013 followed by mild increase in Mar-Apr 2013. Hourly earnings adjusted for inflation increased in Jun 2013 and fell in Jul 2013, increasing in Aug-Dec 2013 and Jan-Mar 2014. Average hourly earnings stagnated in Apr-May 2014 and rebounded mildly in Jul 2014, increasing in Aug 2014 and Sep 2014. Average hourly earnings adjusted for inflation increased in Oct-Dec 2014, Jan-Dec 2015, Jan-Dec 2016 and Jan-Apr 2017, stabilizing in May 2017 and increasing/decreasing in oscillations in Jun-Dec 2017. Average hourly earnings adjusted for inflation increased in Jan-Apr 2018. Average hourly earnings adjusted for inflation stagnated in May-Jun 2018 and decreased in Jul 2018. Average hourly earnings increased 0.5 percent in Aug 2018. Average hourly earnings increased 1.4 percent in Sep 2018 and changed 0.1 percent in Oct 2018, increasing 1.1 percent in Nov 2018. Average hourly earnings increased 2.2 percent in Dec 2018 and increased 1.6 percent in Jan 2019. Average hourly earnings increased 1.9 percent in Feb 2019 and increased 1.5 percent in Mar 2019. Average hourly earnings increased 0.6 percent in Apr 2019 and increased 1.5 percent in May 2019. Average hourly earnings increased 2.4 percent in Jun 2019 and increased 1.0 percent in Jul 2019. Average hourly earnings increased 1.7 percent in Aug 2019 and increased 1.4 percent in Sep 2019. Average hourly earnings increased 1.4 percent in Oct 2019 and increased 1.3 percent in the 12 months ending in Nov 2019. Average hourly earnings increased 0.6 percent in the 12 months ending in Dec 2019 and increased 0.5 percent in the 12 months ending in Jan 2020. Average hourly earnings increased 1.4 percent in the 12 months ending in Feb 2020. Average hourly earnings increased 2.4 percent in the 12 months ending in Mar 2020. Average hourly earnings increased 7.6 percent in the 12 months ending in Apr 2020. Average hourly earnings increased 6.5 percent in the 12 months ending May 2020. Average hourly earnings increased 3.6 percent in the 12 months ending in Jun 2020. The Bureau of Labor Statistics advises on hourly earnings in Apr 2020 (https://www.bls.gov/cps/employment-situation-covid19-faq-april-2020.pdf https://www.bls.gov/covid19/employment-situation-covid19-faq-july-2020.htm): “Similarly, estimates of average hourly earnings for April also must be interpreted with extra caution. Average hourly earnings of all employees on private nonfarm payrolls rose by $1.34 in April to $30.01, following a gain of 15 cents in March. While some workers experienced an increase in pay in April, the increase in average hourly earnings reflects the disproportionate number of lower-paid workers who went off payrolls; their removal put upward pressure on the average hourly earnings estimate.” The Bureau of Labor Statistics states (https://www.bls.gov/cps/employment-situation-covid19-faq-may-2020.pdf https://www.bls.gov/covid19/employment-situation-covid19-faq-july-2020.htm): “Similarly, estimates of average hourly earnings for May must be interpreted with caution. Average hourly earnings of all employees on private nonfarm payrolls declined by 29 cents in May to $29.75, following a gain of $1.35 in April. The increase in average hourly earnings in April largely reflects the disproportionate number of lower-paid workers who went off payrolls, which put upward pressure on the total private average hourly earnings estimate. Some of these workers returned to payrolls in May, and job gains among lower-paid workers put downward pressure on average hourly earnings, though the effect is more muted given the smaller magnitude of the employment change. The large changes in employment in recent months make it difficult to discern longer-term trends in the hours and earnings measures.” The Bureau of Labor Statistics states (https://www.bls.gov/cps/employment-situation-covid19-faq-june-2020.pdf https://www.bls.gov/covid19/employment-situation-covid19-faq-july-2020.htm): “Similarly, changes in average hourly earnings in recent months must be interpreted with caution. Average hourly earnings of all employees on private nonfarm payrolls declined by 35 cents in June to $29.37, following a decrease of 31 cents in May and a gain of $1.34 in April. The increase in average hourly earnings in April largely reflects the disproportionate number of lower-paid workers who went off payrolls, which put upward pressure on the total private average hourly earnings estimate. Some of these workers returned to payrolls in May and June, and job gains among lower-paid workers put downward pressure on average hourly earnings, though the effect is more muted given the smaller magnitude of employment changes in the past 2 months.”

Chart IB-3, Average Hourly Earnings of All Employees NSA 12-Month Percent Change, 1982-1984 Dollars, NSA 2007-2020

Source: US Bureau of Labor Statistics https://www.bls.gov/data

Average weekly earnings of the dataset of the US Bureau of Labor Statistics (BLS) are in Table IB-5. Average weekly earnings fell 3.2 percent after adjusting for inflation in the 12 months ending in Aug 2011, decreased 1.2 percent in the 12 months ending in Sep 2011 and increased 0.6 percent in the 12 months ending in Oct 2011. Average weekly earnings fell 1.1 percent in the 12 months ending in Nov 2011 and fell 0.4 percent in the 12 months ending in Dec 2011. Average weekly earnings declined 0.3 percent in the 12 months ending in Jan 2012 and fell 0.5 percent in the 12 months ending in Feb 2012. Average weekly earnings in constant dollars were virtually flat in Mar 2012 relative to Mar 2011, decreasing 0.2 percent. Average weekly earnings in constant dollars increased 1.7 percent in Apr 2012 relative to Apr 2011 but fell 1.7 percent in May 2012 relative to May 2011, increasing 0.6 percent in the 12 months ending in Jun 2012 and 1.8 percent in the 12 months ending in Jul 2012. Real weekly earnings increased 0.4 percent in the 12 months ending in Aug 2012 and 2.2 percent in the 12 months ending in Sep 2012. Real weekly earnings fell 2.6 percent in the 12 months ending in Oct 2012 and increased 0.1 percent in the 12 months ending in Nov 2012 and 2.2 percent in the 12 months ending in Dec 2012. Real weekly earnings fell 1.7 percent in the 12 months ending in Jan 2013 and virtually stagnated with gain of 0.2 percent in the 12 months ending in Feb 2013, increasing 0.8 percent in the 12 months ending in Mar 2013. Real weekly earnings fell 0.6 percent in the 12 months ending in Apr 2013 and increased 0.9 percent in the 12 months ending in May 2013. Average weekly earnings increased 2.5 percent in the 12 months ending in Jun 2013 and fell 1.7 percent in the 12 months ending in Jul 2013. Real weekly earnings increased 0.7 percent in the 12 months ending in Aug 2013, 1.2 percent in the 12 months ending in Sep 2013 and 1.6 percent in the 12 months ending in Oct 2013. Average weekly earnings increased 1.3 percent in the 12 months ending in Nov 2013 and increased 0.1 percent in the 12 months ending in Dec 2013. Average weekly earnings increased 0.4 percent in the 12 months ending in Jan 2014 and 2.3 percent in the 12 months ending in Feb 2014. Average weekly earnings increased 2.4 percent in the 12 months ending in Mar 2014 and 0.3 percent in the 12 months ending in Apr 2014. Average weekly earnings in constant dollars increased 0.3 percent in the 12 months ending in May 2014 and changed 0.0 percent in the 12 months ending in Jun 2014. Real average weekly earnings increased 0.7 percent in the 12 months ending in Jul 2014 and 0.8 percent in the 12 months ending in Aug 2014. Real weekly earnings decreased 1.4 percent in the 12 months ending in Sep 2014 and increased 0.6 percent in the 12 months ending in Oct 2014. Average weekly earnings increased 2.9 percent in the 12 months ending in Nov 2014 and increased 0.1 percent in the 12 months ending in Dec 2014. Average weekly earnings increased 2.9 percent in the 12 months ending in Jan 2015 and increased 2.5 percent in the 12 months ending in Feb 2015. Average weekly earnings adjusted for inflation increased 2.3 percent in the 12 months ending in Mar 2015 and increased 2.4 percent in the 12 months ending in Apr 2015. Average weekly earnings adjusted for inflation increased 2.4 percent in the 12 months ending in May 2015 and increased 0.1 percent in the 12 months ending in Jun 2015. Average weekly earnings increased 2.0 percent in the 12 months ending in Jul 2015 and 4.2 percent in the 12 months ending in Aug 2015. Average weekly earnings adjusted for inflation increased 1.7 percent in the 12 months ending in Sep 2015 and increased 2.4 percent in the 12 months ending in Oct 2015. Average weekly earnings adjusted for inflation increased 1.6 percent in the 12 months ending in Nov 2015 and increased 1.5 percent in the 12 months ending in Dec 2015. Average weekly earnings increased 1.1 percent in the 12 months ending in Jan 2016. Average weekly earnings contracted 0.8 percent in the 12 months ending in Feb 2015 and contracted 0.5 percent in the 12 months ending in Mar 2016. Average weekly earnings increased 1.2 percent in the 12 months ending in Apr 2016 and increased 2.7 percent in the 12 months ending in May 2016. Average weekly earnings increased 1.3 percent in the 12 months ending in Jun 2016 and increased 1.6 percent in the 12 months ending in Jul 2016. Average weekly earnings decreased 1.2 percent in the 12 months ending in Aug 2016 and increased 1.5 percent in the 12 months ending in Sep 2016. Average weekly earnings increased 2.7 percent in the 12 months ending in Oct 2016 and decreased 1.3 percent in the 12 months ending in Nov 2016. Average weekly earnings changed 0.0 percent in the 12 months ending in Dec 2016 and increased 1.2 percent in the 12 months ending in Jan 2017. Average weekly earnings changed 0.0 percent in the 12 months ending in Feb 2017. Average weekly earnings decreased 0.1 percent in the 12 months ending in Mar 2017 and increased 1.9 percent in the 12 months ending in Apr 2017. Average weekly earnings decreased 0.9 percent in the 12 months ending in May 2017 and increased 0.8 percent in the 12 months ending in Jun 2017. Average weekly earnings increased 2.7 percent in the 12 months ending in Jul 2017 and increased 0.7 percent in the 12 months ending in Aug 2017. Average weekly earnings increased 0.3 percent in the 12 months ending in Sep 2017 and increased 0.3 percent in the 12 months ending in Oct 2017. Average weekly earnings increased 0.5 percent in the 12 months ending in Nov 2017. Average weekly earnings increased 1.2 percent in the 12 months ending in Dec 2017. Average weekly earnings decreased 1.1 percent in the 12 months ending in Jan 2018 and increased 0.9 percent in the 12 months ending in Feb 2018. Average weekly earnings increased 1.0 percent in the 12 months ending in Mar 2018 and increased 0.9 percent in the 12 months ending in Apr 2018. Average weekly earnings increased 0.4 percent in the 12 months ending in May 2018 and increased 0.6 percent in the 12 months ending in Jun 2018. Average weekly earnings increased 0.2 percent in the 12 months ending in Jul 2018. Average weekly earnings increased 1.0 percent in the 12 months ending in Aug 2018. Average weekly earnings increased 2.9 percent in the 12 months ending in Sep 2018 and decreased 1.1 percent in the 12 months ending in Oct 2018. Average weekly earnings increased 1.1 percent in the 12 months ending in Nov 2018. Average weekly earnings increased 3.4 percent in the 12 months ending in Dec 2018. Average weekly earnings increased 1.9 percent in the 12 months ending in Jan 2019 and increased 1.4 percent in the 12 months ending in Feb 2019. Average weekly earnings increased 1.5 percent in the 12 months ending in Mar 2019. Average weekly earnings decreased 0.9 percent in the 12 months ending in Apr 2019. Average weekly earnings increased 1.2 percent in the 12 months ending in May 2019 and increased 3.3 percent in the 12 months ending in Jun 2019. Average weekly earnings decreased 0.7 percent in the 12 months ending in Jul 2019. Average weekly earnings increased 1.4 percent in the 12 months ending in Aug 2019 and increased 1.4 percent in the 12 months ending in Sep 2019. Average weekly earnings increased 1.1 percent in the 12 months ending in Oct 2019. Average weekly earnings increased 0.7 percent in the 12 months ending in Nov 2019. Average weekly earnings increased 0.1 percent in the 12 months ending in Dec 2019. Average weekly earnings decreased 0.1 percent in the 12 months ending in Jan 2020. Average weekly earnings increased 2.2 percent in the 12 months ending in Feb 2020. Average weekly earnings increased 2.3 percent in the 12 months ending in Mar 2020. Average weekly earnings increased 7.0 percent in the 12 months ending in Apr 2020. Average weekly earnings increased 7.4 percent in the 12 months ending in May 2020. Average weekly earnings increased 2.7 percent in the 12 months ending in Jun 2020. Table I-5 confirms the trend of deterioration of purchasing power of average weekly earnings in 2011 and into 2013 with oscillations according to carry trades causing world inflation waves (https://cmpassocregulationblog.blogspot.com/2020/07/contraction-of-household-wealth-by-14.html and earlier https://cmpassocregulationblog.blogspot.com/2020/06/mediocre-cyclical-united-states.html). On an annual basis, average weekly earnings in constant 1982-1984 dollars increased from $347.13 in 2007 to $354.10 in 2013, by 2.0 percent or at the average rate of 0.3 percent per year (data in http://www.bls.gov/data/). Annual average weekly earnings in constant dollars of $352.92 in 2010 fell 0.4 percent to $351.54 in 2011. Annual average weekly earnings increased from $347.13 in 2007 to $356.85 in 2014 or by 2.8 at the average rate of 0.4 percent. Annual average weekly earnings in constant dollars increased from $347.13 in 2007 to $364.56 in 2015 by 5.0 percent at the average rate of 0.6 percent per year. Annual average weekly earnings in constant dollar increased from $347.13 in 2007 to $367.11 in 2016 by 5.8 percent at the average rate of 0.6 percent per year. Average weekly earnings in constant dollars increased from $347.13 in 2007 to $369.69 in 2017 by 6.5 percent at the average rate of 0.6 percent per year. Average weekly earnings in constant dollars increased from $347.13 in 2007 to $372.90 in 2018 by 7.4 percent at the average rate of 0.7 percent per year. Average weekly earnings in constant dollars increased from $347.13 in 2007 to $376.71 in 2019 by 8.5 percent at the average rate of 0.7 percent per year. Those who still work bring back home a paycheck that buys fewer high-quality goods than a year earlier. The fractured US job market does not provide an opportunity for advancement as in past booms following recessions because of poor job creation with 38.5 million unemployed or underemployed (Section I and earlier https://cmpassocregulationblog.blogspot.com/2020/07/increase-of-total-nonfarm-payroll-jobs.html) because of mediocre economic growth (https://cmpassocregulationblog.blogspot.com/2020/08/contraction-of-united-states-gdp-at-32_57.html and earlier https://cmpassocregulationblog.blogspot.com/2020/06/mediocre-cyclical-united-states.html).The BLS is revising the data from 2006 to 2009 (http://www.bls.gov/ces/#notices) now available for the release of Jan 2016 and subsequent releases.

Table IB-5, US, Average Weekly Earnings of All Employees in Constant Dollars of 1982-1984, NSA 2006-2020

Year	Apr	May	Jun	Dec
2006	347.58	337.80	339.76	351.16
2007	350.37	342.59	343.92	352.91
2008	341.17	337.84	341.61	354.11
2009	347.66	346.28	342.95	350.29
2010	351.37	356.33	349.50	355.14
2011	349.14	353.10	346.61	353.80
2012	355.05	347.04	348.68	361.49
∆%12M	1.7	-1.7	0.6	2.2
2013	352.84	350.30	357.51	361.82
∆%12M	-0.6	0.9	2.5	0.1
2014	354.05	351.37	357.58	362.19
∆%12M	0.3	0.3	0.0	0.1
2015	362.61	359.90	357.96	367.57
∆%12M	2.4	2.4	0.1	1.5
2016	366.85	369.72	362.67	367.53
∆%12M	1.2	2.7	1.3	0.0
2017	373.84	366.22	365.55	371.98
∆%12M	1.9	-0.9	0.8	1.2
2018	377.24	367.81	367.85	384.65
∆%12M	0.9	0.4	0.6	3.4
2019	373.94	372.07	380.14	384.98
∆%12M	-0.9	1.2	3.3	0.1
2020	400.07	399.58	390.30
∆%12M	7.0	7.4	2.7

Source: US Bureau of Labor Statistics

https://www.bls.gov/

The same pattern emerges of sharp decline during the contraction, followed by recovery in the expansion and continuing fall with oscillations caused by carry trades from zero interest rates into commodity futures from 2010 to 2011 and into 2012-2019. The increase in the final segment is mostly because of collapse of commodity prices in reversals of carry trade exposures followed by reversal of carry trades and new decreases/stability. The BLS is revising the data from 2006 to 2009 (http://www.bls.gov/ces/#notices) available for the release of Jan 2016 and subsequent releases.

Chart IB-4, US, Average Weekly Earnings of All Employees in Constant Dollars of 1982-1984, SA 2006-2020

Source: US Bureau of Labor Statistics https://www.bls.gov/data

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