And The Not So Pretty: Record Low Rise In Average Hourly Wages

Tyler Durden's picture


As we first observed in February of 2012, we will not tire of repeating that when it comes to the jobs picture there are two key components: the quantitative, or the headline jobs and unemployment rate numbers everyone is fascinated by at 8:30 am each first Friday of the month, and the qualitative, or the number that gets far less attention, yet which is so very critical to Americans on those occasions they want to use their earned wages to purchase goods and services. And this is where the ugly side of today's jobs report came out. Because while the quantitative data was good, just as we and everyone else had expected from the final datapoint before the election (the good news there is that finally we will revert to reality following November 6), the qualitative data was ugly. How ugly? As the BLS reported, the average hourly earnings in October declined from $19.80 to $19.79 in September, and at $19.57 last October. This was only the fifth sequential decline in this series since the start of the Depression in December 2007. But more important was the Y/Y change in average hourly earnings. At 1.1% (down from 1.4% a month ago), this was the lowest Y/Y increase in this series, topping the collapse in real earnings which started in December 2008, and is now the lowest in history. In other words, more jobs may be added, but on a real basis, wages are not even keeping up with inflation!

Compared to job "gains", it is obvious that all nominal gains are at the expense of wage losses:

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Fri, 11/02/2012 - 09:32 | 2940797 LawsofPhysics
LawsofPhysics's picture

Wait what?  Wages matter?!?!  - < sarc off >


Stupid fucking sheep.

Fri, 11/02/2012 - 09:36 | 2940804 GetZeeGold
GetZeeGold's picture



You want to work for me? How much are you offering?

Fri, 11/02/2012 - 09:36 | 2940815 northerngirl
northerngirl's picture

LOL!  Great post.

Fri, 11/02/2012 - 09:43 | 2940847 kaiserhoff
kaiserhoff's picture

Joke jobs uber alles.

Fri, 11/02/2012 - 09:46 | 2940861 Enslavethechild...
EnslavethechildrenforBen's picture

When adjusted for the amount of real estate an hour working will buy you, the chart would fall completely off your computer screen down on to your lap

Fri, 11/02/2012 - 10:14 | 2940950 Almost Solvent
Almost Solvent's picture

and through the floor to the basement.

Fri, 11/02/2012 - 12:06 | 2941432 GlobalCtzn
GlobalCtzn's picture

and through the earth and land right on some employed China worker's head....................

Fri, 11/02/2012 - 12:14 | 2941475 Jumbotron
Jumbotron's picture

and through the earth and land right on some employed China worker's head....................


ROFLMFSAO......(the S stands for SERF)

Fri, 11/02/2012 - 09:52 | 2940884 BandGap
BandGap's picture

No way they throw out the BLS algo for jobs. It will be as useful to Romney as it was for the brown motherf*ckin' clown.

The pendulum swings back the other way. Next Tuesday it will be the exposed liberals who will be angry. But their anger will only fuel anger directed towards them. Tell you what, if Wisconsin goes for Romney then hell has frozen over.

And WTF is MaYour Bloomberg thinking? Does this asshole want to intentionally piss people off in a city a stone's throw from from a third world country?

Fri, 11/02/2012 - 09:58 | 2940904 Stock Tips Inve...
Stock Tips Investment's picture

Correct. That may be one of the reasons for this reduction. The other, which is less dramatic is the following. Most of the jobs that our economy is generating, are at lower salary levels. Accordingly, the gain per hour promedo reduced. And this can be given, not because hourly wages are falling. The explanation may lie in the composition of new workers. Actually, by now, I do not like a dramatic situción to overshadow lower unemployment.

Fri, 11/02/2012 - 10:22 | 2940990 MilleniumJane
MilleniumJane's picture just posted yesterday that it's Not Just a Low-Wage Recovery!

'Course we all believe what CNN says! (sarc)

Fri, 11/02/2012 - 10:38 | 2941068 DosZap
DosZap's picture

Oh, and do not forget 75% of ALL new job placements went to Immigrants, or Illegals.................................ready for welcome to Wal Murt?.

Fri, 11/02/2012 - 09:50 | 2940874 vast-dom
vast-dom's picture

F R A U D confirmed.

Fri, 11/02/2012 - 11:50 | 2941366 midtowng
midtowng's picture

So we replace full-time jobs with part-time jobs, but the headline BLS number looks great, so the news media celebrates.

Fri, 11/02/2012 - 09:32 | 2940801 economics9698
economics9698's picture

Good work Tyler, this is what is important.

Fri, 11/02/2012 - 09:34 | 2940802 firstdivision
firstdivision's picture

Which means all these "jobs added" have been well below median income.  Goes to show what a growing (part-time) economy can do.

With the entire American labor force becoming part-time, does that mean I can pay my bills part of the time?

Fri, 11/02/2012 - 09:36 | 2940814 TeamDepends
TeamDepends's picture

Hey, somebody has to twirl those signs.

Fri, 11/02/2012 - 09:47 | 2940865 Rainman
Rainman's picture

Bernank's mandate is to produce McJobs....wage growth is assigned to some other unidentified bureaucrat.

Fri, 11/02/2012 - 09:49 | 2940872 disabledvet
disabledvet's picture

"With a hyper inflationary kicker...

Fri, 11/02/2012 - 09:36 | 2940806 Mercury
Mercury's picture

Remember, in places like Cuba where they really have the central planning thing down to a science, the unemployment rate is always ~0%.

Fri, 11/02/2012 - 09:38 | 2940825 dwdollar
dwdollar's picture

Irrelevant numbers for an irrelevant market...

Fri, 11/02/2012 - 09:59 | 2940910 A Nanny Moose
A Nanny Moose's picture

Market? What market?

Fri, 11/02/2012 - 09:44 | 2940852 Broccoli
Broccoli's picture

Cave man unempolyment was 0%.

Fri, 11/02/2012 - 10:03 | 2940920 Enslavethechild...
EnslavethechildrenforBen's picture

American indians pre-white people: 100% employment

Fri, 11/02/2012 - 10:17 | 2940946 Mercury
Mercury's picture

The gee-whiz similarities between communism and stone-age cultures are even greater than you might think.

The Indians probably had free healthcare too.

Fri, 11/02/2012 - 09:34 | 2940807 Mrmojorisin515
Mrmojorisin515's picture

i knew my paychecks weren't going as far as before

Fri, 11/02/2012 - 09:52 | 2940883 Metalredneck
Metalredneck's picture

My take-home pay takes me part way home.

Fri, 11/02/2012 - 09:34 | 2940810 Dr. Engali
Dr. Engali's picture

Wages are losing money against the propoganda inflation numbers but in real terms the consumer is losing about 8% per year.

Fri, 11/02/2012 - 09:36 | 2940813 firstdivision
firstdivision's picture

Wages are losing in general, not just to inflation.

Fri, 11/02/2012 - 10:06 | 2940932 Enslavethechild...
EnslavethechildrenforBen's picture

Wages will soon lose 50% per year, then in a few years wages will lose 90% per year

and they call it a recession lol

Fri, 11/02/2012 - 09:35 | 2940811 HD
HD's picture

It's worse than just falling wages. Consumers no longer have access to easy credit or using their house like a giant piggy bank...

Fri, 11/02/2012 - 09:37 | 2940820 LawsofPhysics
LawsofPhysics's picture

"Consumers no longer have access to easy credit or using their house like a giant piggy bank..."


Sorry, I don't see that as a bad thing, stupid fucks need to live within their means.  Now inflation in essential goods and services is another thing altogether.

Fri, 11/02/2012 - 09:40 | 2940832 HD
HD's picture

I'm not advocating debt mate. I am suggesting that large purchases (anything that costs more than a new - soon to be obsolete iThing) like college for the kids and health care can no longer just be financed and forgotten.

Fri, 11/02/2012 - 09:46 | 2940864 adr
adr's picture

I've got an 800 credit score and a steady job for 8 years. Doesn't mean anything if my company goes bankrupt because of the economy.

Of course I could go on an all out debt binge and "help" the economy by spending over $150k in available credit on stuff. Stuff that will never be paid for.

But debt is actually wealth according to Krugman.

Fri, 11/02/2012 - 09:57 | 2940899 HD
HD's picture

My point, which I failed miserably to convey - is that families who were supplementing falling wages with debt to buy essentials - whether that be food, rent, higher education, health care, child or elder care no longer have that option. Those needs don't go away.

"Someone" is going to pay for those needs one way or the other - look no further than the massive expansion of food stamps and "disability" recipients in the past few years.

Fri, 11/02/2012 - 10:19 | 2940975 MachoMan
MachoMan's picture

It went from debt to retirement account to selling everything not nailed down to a combination of all (raiding retirement and selling gold for pennies on the dollar to pay solely for debt service, at best).  Totally fucked.

Fri, 11/02/2012 - 10:34 | 2941047 HD
HD's picture

Well said.

Fri, 11/02/2012 - 09:51 | 2940881 Enslavethechild...
EnslavethechildrenforBen's picture

@lawsofphysics - consumers don't have access to credit now, the banks do at zero interest. Soon the banks will have all our properties and they will start selling them to us again, but they will raise interest rates high so they can screw us royaly

Fri, 11/02/2012 - 09:59 | 2940908 LawsofPhysics
LawsofPhysics's picture

so frontrun it all.  Don't quite know what your point is here, life is hard, deal with it (beat the fuckers at their own game) or go away.

Fri, 11/02/2012 - 10:12 | 2940944 Enslavethechild...
EnslavethechildrenforBen's picture

To beat the fuckers at their own game we would have the printing press and control their money supply

Our founding fathers saw it wise to shoot them dead (the redcoats)

I'm just another messanger - behead me if you like

Fri, 11/02/2012 - 10:48 | 2940967 LawsofPhysics
LawsofPhysics's picture

patience.  it's coming, so don't volunteer for the guillotine just yet.

Fri, 11/02/2012 - 09:56 | 2940896 firstdivision
firstdivision's picture

How the fuck am I supposed to keep up with the Jones', if I should not go into as much debt as the Jones'?

Fri, 11/02/2012 - 09:37 | 2940817 The big unzip
The big unzip's picture

Something is rotten in the state of Denmark.

Fri, 11/02/2012 - 09:53 | 2940886 Metalredneck
Metalredneck's picture

But not in Iceland...

Fri, 11/02/2012 - 09:38 | 2940822 Racer
Racer's picture

Real wages are not keeping up with the fake and very downplayed inflation that they make up. Compare against real inflation for necessities and the situation is much much worse

Fri, 11/02/2012 - 09:38 | 2940823 orangegeek
orangegeek's picture

Deflation folks.  Enjoy the next 20-30 years.

Fri, 11/02/2012 - 09:45 | 2940854 yrbmegr
yrbmegr's picture

Correction:  wage deflation.

Fri, 11/02/2012 - 09:42 | 2940841 adr
adr's picture

You don't need wages. Lots of people worked on cotton farms without wages for a couple hundred years and were provided for.

Hell for supreme irony today, millions of people can work jobs to support the millions of people who descended from the people who worked on the cotton farms so they no longer have to work.

You can even have one of them in the White House making sure they can get as much support as possible.

Slavery, the way of the world minus a couple hundred years.

Fri, 11/02/2012 - 10:21 | 2940983 MachoMan
MachoMan's picture

You are a racism

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