Real Wage Growth

Year-over-year growth in average hourly earnings minus year-over-year CPI inflation. Sustained positive real wage growth is necessary for durable consumer spending. Turned deeply negative in 2021–22 (peak: -4.5% YoY) — the largest real wage erosion since the 1970s.

This indicator is computed by MacroLab from two FRED series: AHETPI (YoY) minus CPIAUCSL (YoY). Both input series are sourced from the Federal Reserve Economic Data (FRED) database.