On Friday’s broadcast of Bloomberg’s “Open Interest,” White House Council of Economic Advisers Chairman Christopher Phelan responded to a question on hourly earnings not keeping up with inflation by saying that “Part of the booming economy that we’re having in the labor market that was shown up in this month is not just showing up in wages but showing up in hours,” which, combined, are outpacing inflation.
Co-host Michael McKee said, “Average hourly earnings are running below the level of inflation right now, 3.1% this August, and inflation at 3.4% for CPI and 3.7% for PCE and you’ve got gasoline at $4.15. It keeps going up. Your focus has been on how many jobs were created, but Americans seem to be focusing on their earnings and the cost of living.”
Phelan responded, “I specifically talked about average weekly earnings, not hourly. Because what matters to people is what they bring home at the end of the week, which is a combination of hourly earnings and how many hours you get to work. Part of the booming economy that we’re having in the labor market that was shown up in this month is not just showing up in wages but showing up in hours, which are — when you combine hours and wages, average weekly earnings are outstripping inflation.”
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