Average Earnings Fall, Consumer Price Index Rises In July

Real average hourly earnings for all employees fell by 0.4% from June to July on a seasonally adjusted basis, the Bureau of Labor and Statistics said Wednesday. 

What Happened: Real average hourly earnings decreased 0.4% for a reported $11.36 average hourly earning rate.

The 0.4% decrease comes from a 0.2% increase in average hourly earnings being eclipsed by a 0.6% increase in the Consumer Price Index for All Urban Consumers, or CPI. 

Why It’s Important: The BLS reported a 0.3% decrease in the average workweek, which helped contribute to a 0.6% decrease in real average weekly earnings. The average hourly workweek was 34.5 hours for all private nonfarm payrolls.

From July 2019 to July 2020, the average workweek has increased 0.6%, contributing to a 4.3% increase in real average weekly earnings over this period.

During the same period, real average hourly earnings increased 3.7%.

What’s Next: With national unemployment decreasing from a record high to around 10% in July, keep watching whether real average earnings continue to decline. Some of this earnings decline could be attributed to a higher CPI, as prices for some goods are costing consumers more.

Real earnings for August 2020 are scheduled to be released at 8:30 a.m. on Friday, Sept. 11.