Real Earnings MoM

Real Earnings MoM tracks inflation-adjusted pay change from the prior month for US private nonfarm payroll jobs. It is published by BLS (the federal labor statistics agency) from CES payroll records (Current Employment Statistics, a monthly survey of business establishments).

It covers 2 groups: AE (all private employees, tracked from 2006) and PE (production and nonsupervisory employees, tracked from 1964). Pay is deflated by CPI (a consumer price gauge) to show buying power. It is not take-home pay, and not pay for a typical worker.

It excludes government, farm, and self-employed jobs. Values are expressed in constant 1982-1984 dollars, with no target level.

Responses cover the pay period including the 12th of the reference month. It is released monthly on the morning of the CPI release. It usually lands between the 10th and 14th of the next month at 8:30 AM ET.

The release stays under embargo as a principal federal economic indicator. Tables show hourly and weekly pay in current and inflation-adjusted (1982-1984) dollars. They report monthly and over-the-year percent changes linked to pay, prices, and the workweek.

First releases are marked (p) for preliminary, then revised after one month and finalized after two. An annual benchmark re-anchors estimates to near-universe counts and refreshes five years of adjusted values.

The MoM headline is the net of 3 moving parts across 2 worker groups.

• Nominal hourly pay, all employees: mean hourly pay in current dollars before price adjustment. It is the numerator that the price index divides.
• Nominal hourly pay, production and nonsupervisory: the same mean for production and nonsupervisory jobs only.
• CPI deflator: price change subtracted by division from nominal pay growth. CPI-U applies to all-employee pay and CPI-W to production pay.
• Average workweek: mean weekly hours, which turns hourly pay into weekly pay. Longer hours lift weekly earnings even if hourly pay is flat.
• Industry mix: hiring or layoffs in high- versus low-wage industries shift the mean. This happens with no change in wage rates.

The April 2020 release, published May 12, 2020, showed real hourly pay for all employees up 5.6% on the month. That came from 4.7% nominal pay growth with a 0.8% fall in consumer prices. Real weekly pay rose 5.8% as the average workweek lengthened 0.3%. Nominal pay reached $30.01, the price index 255.902, and real pay $11.73.

Production workers matched the pattern, up 5.3% hourly and 5.6% weekly, while a boxed notice flagged pandemic effects on payroll data. Nobody got broad raises: tens of millions of lower-paid jobs vanished. The mean across remaining jobs therefore spiked with no change in wage rates.

1. Average hourly earnings (AHE, mean pay per hour): total weekly payroll divided by total weekly hours. Broad totals weight each cell by its hours.
2. Weekly hours (AWH, mean hours per job): total weekly hours divided by jobs paid. It counts jobs, including part-time and second jobs, not workers.
3. Weekly pay (AWE, mean pay per week): hours times hourly pay. For example, $35.00 times 34.3 hours equals $1,200.50.
4. Real pay (1982-1984 dollars): divide pay by CPI and multiply by 100. AE uses CPI-U and PE uses CPI-W. For example, $35.00 at 313.500 gives $11.16.
5. Seasonal adjustment (X-13ARIMA-SEATS): published levels and percent changes are seasonally adjusted. The method handles 4- versus 5-week survey gaps and floating holidays.
6. Attribution (splitting the monthly move): real growth equals nominal growth divided by price growth. Weekly real growth then adds workweek change. For example, 0.4% pay growth with 0.2% inflation gives about 0.2% real growth. A 0.3% longer workweek lifts the weekly gain to about 0.5%.