US Daily Data Recap "Hot CPI, Warsh vote, lower real earnings" Wilcox

Research evidence excerpt

US Daily Data Recap "Hot CPI, Warsh vote, lower real earnings" Wilcox

Real average hourly earnings fall back again in April

Real average hourly earnings, released alongside the CPI report, have begun to decline

again. This comes as the recent rise in gasoline prices, adds to inflation, alongside the

continued cooling in nominal wages. Real average hourly earnings for all employees fell

for the second consecutive month down $0.06 to $11.25 in April, and down 0.3% over

the year. Below, we show how average hourly earnings of production and

nonsupervisory employees given the longer time series. Real earnings for this group also

fell $0.03 to $9.89 ( -0.3%) in April.

In the Economic Comment of last week’s US Economics Weekly we asked the question, No wonder voters are focused on

why is labor’s share of income so low? (link here) One theme that runs through most of affordability.

those reasons is a lack of wage bargaining power for employees. The pandemic offered

a glimpse of nominal wage inflation and demand for workers putting employees in the

driver’s seat but since late 2024 the prior trends have reasserted themselves. How one

thinks about wage bargaining has implications for how one thinks about inflation, the

impact of the potential AI disruption, and what higher prices might do to erode real

incomes and keep the affordability theme central to our politics.

Figure 1: Inflation weighing on real average hourly earnings

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Infla

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real avera ge hourly earnings

Source: BLS, Haver, UBS

FRBNY: +90 day delinquent auto loan hit series high

FRB of New York’s Quarterly Report on Household Debt and Credit reported Transitions into delinquency look

delinquency were relatively stable for most loan categories, but the stock of fairly stable but the stocks of auto