Stats on Sunday -- 12/4/2022

Once again this past Friday, the Employment Situation report from the Bureau of Labor Statistics (BLS) received a lot of attention. Interestingly, one of the most talked about items in the report related to wages. Let's take a closer look.

The "payroll" information within the monthly Employment Situation report comes from a survey of employers, the Current Employment Statistics program. Each month, thousands of employers are asked to report a few numbers from their payroll records, including number of employees and wages. The wage information is used to compute Average Hourly Earnings, which is reported in the monthly release.

Table B-3 in the Employment Situation report includes average hourly earnings and average weekly earnings. In November, hourly earnings in the private sector averaged $32.82. The table also shows much variation by industry sector. For example, the average in the leisure and hospitality industry sector, which includes restaurants and hotels, was $20.51 per hour.

You can also look at average hourly earnings for production and nonsupervisory employees, a subset of the information for all private sector workers. This information is found in table B-8.

While the numbers may be interesting, what often gets attention is the change from month to month, or over the year, and the relationship to inflation. As noted at the bottom of page 3 of the report, average hourly earnings for all private sector workers have increased by 5.1 percent over the year. Of course, this is less than the annual increase in the Consumer Price Index (CPI), which as of October was 7.7 percent. November CPI data will be released on December 13.

Along with the CPI release, BLS releases a monthly report on Real Earnings, which takes the Average Hourly Earnings and adjusts for inflation. Put that one on your reading list as well.