Without getting into the reasons behind why the United States economy has boomed over the past year, we can all agree on one thing – the US economy has undeniably been on an upswing across the past 12 months.
When a nation’s economy becomes stronger, that means more money changes hands; economic and common sense alike suggest that workers in stronger economies should be paid more than what they were given in past years. However, the United States Bureau of Labor Statistics released official information on Friday, August 10, 2018, that the average United States employee’s wages fell over the past 12 months.
The US Bureau of Labor Statistics’ most recent crunching of numbers related to the economy and job market resulted in a metric that is known as real average hourly earnings dropping 0.4%. This metric already has effects such as the change of various goods’ and services’ prices, seasonal differences in prices and job demand, and other relevant market phenomena.
One one hand, the average workweek’s length grew, which means that the average earnings in terms of the wages earned by United States workers grew as well. However, even this wasn’t enough to compensate for the drop in wages; average weekly earnings, another common statistic used by the United States Bureau of Labor Statistics to tell the nation about what has went on in its market throughout the past year, dropped 0.1%.
Real hourly wages, however, didn’t budge at all, which means that inflation outpaced the increase in wages; because inflation makes currencies worth less – it’s worth mentioning that the United States Dollar has been subject to a fair amount of inflation over the past year because of the robust activity of the United States economy – wages were reported as having decreased.
Real weekly earnings – this metric is calculated by averaging together every United States employee’s earnings – went down roughly 0.2%.
In the second fiscal quarter of 2018, the economy grew at a rate of 4.2% – this rate has been translated into an annualized rate, which means if the current economic growth continued for three more quarters, it would ultimately grow a total of 4.2% – which is one of the highest growth rates in recent years. Unemployment dropped under 4% last month.