Workers average weekly real earnings fell in July, purchasing power squeezed
San José, CA – Average weekly earnings, adjusted for inflation, fell in July despite a drop in inflation. While average hourly wages outpaced inflation by one-tenth of one percent, or 0.1% ,in July, the average work week fell by three-tenths of one percent, or 0.3%. This meant the average weekly real earnings, which takes into account wage increases, inflation and the average number of hours worked, actually fell by two-tenths of one percent, 0.2%.
Mainstream newspapers have been running articles for weeks and months about how workers’ feelings about the economy don’t match the improving economic data. But these articles are talking about the fall in inflation, which did go down to a 2.9% increase in average prices over the past year, the lowest since April of 2021. And while wages have been outpacing prices recently, the average number of hours has fallen as the labor market has been weakening and the unemployment rate has risen. Put it all together and workers did lose ground again in July of 2024.