Feelin’ Better Now Than Four Years Ago? Let’s Fact Check!

I address the question from the standpoint of real (inflation adjusted) hourly earnings and assets, specifically home ownership.

Real Hourly Earnings Chart Notes

• Hourly wages are adjusted by the Consumer Price Index 1982-1984=100
• Private workers make 7 cents more per hour than a year ago, 4 cents more per hour than two years ago, 24 cents less per hour than three years ago, and 61 cents less per hour than in March of 2020 during the pandemic.
• Production and nonsupervisory workers make 7 cents more per hour than a year ago, 15 cents more per hour than two years ago, 6 cents less per hour than three years ago, and 37 cents less per hour than in March of 2020 during the pandemic.

Those are my calculation, but they match calculations from the BLS Real Hourly Earnings Report for March of 2024.

Quick Hourly Earning Synopsis

Private workers make 7 cents more per hour than a year ago, but 61 cents less per hour than four years ago.

Production and nonsupervisory workers make 7 cents more per hour than a year ago, but 37 cents less per hour than four years ago.

Four years ago you may not have had a job, especially is you worked in the restaurant or hotel industry. However, please recall that the government paid you more to not work than you made working.

Hourly Earnings and Real Hourly Earnings

Hourly Earnings and Real Hourly Earnings Synopsis

• Today, private workers make an average of $34.69 per hour, up $7.97 from four years ago. But inflation-adjusted wages are down $0.61 per hour from four years ago.
• Today, production and nonsupervisory workers make $29.79 per hour, up $4.80 from four years ago. But inflation adjusted wages are down $0.37 per hour from four years ago

The total private data series only dates to March of 2006 but the production and nonsupervisory data goes back all the way top 1947.

A relative high point was in February of 1973. Production workers made $4.05 but that is nearly the same as making $29.79 today.

Inflation-adjusted wages were $9.38 in 1973 and they are $9.72 today. That’s a total increase of $0.34 in 51 years!

Do You Own a House?

Things change greatly if you own a house or invested in the stock market or land.

Chart Notes

• National and 10-City Case-Shiller home prices hit new record highs in August.
• OER, CPI, and Rent are indexes measured by the Bureau of Labor Statistics (BLS).
• OER stands for Owners’ Equivalent Rent. It’s the price one would pay to rent one’s own house unfurnished and without utilities.

Case-Shiller measures repeat sales of the same home over time and the indexes attempt to weed out major home improvements.

Case-Shiller is a far better measure of home prices than median or average prices which do not factor in the number of rooms, location, lot size, or amenities.

Home Prices Hit New Record High

I discussed home prices on March 29, in Case-Shiller National Home Price Index Hits New Record High

The Case-Shiller national home price Index was 338.4 in March of 2020. As of January 2024 (the latest data), it is 493.0.

That’s an increase of 45.7 percent in just under for years. And you were able to refinance at or under 3.0 percent too.

Refinancing put extra money in your pocket every month since. That supports consumption and inflation.

The CPI Rose Sharply in March

The CPI rose 0.4 percent in March. Rent is up another 0.4 percent in March with gasoline up 1.7 percent. Together, the pair was about half of the total rise.

Earlier today I reported The CPI Rose Sharply in March Led by Shelter and Gasoline

Please click on that link for details and more charts.

Yet Another Groundhog Day for Rent

I repeat my core key theme for over two years now. People keep telling me rents are falling, I keep saying they aren’t.

Rent of primary residence, the cost that best equates to the rent people pay, jumped another 0.4 percent in March.  Rent of primary residence has gone up at least 0.4 percent for 31 consecutive months! 

The Economy is Election Issue #1

In the Wall Street Journal Poll, it was unanimous, and by large scores, the economy is doing not so good or poor (first horizontal yellow highlight).

Across the board, more respondents in every state said their economy was getting worse than better. In Arizona and Pennsylvania, the margin of getting worse than getting better was more than 2-1 for getting worse.

Other polls distinguish between the economy and inflation. Some people confuse the two, and they are closely related.

In those polls, I think you need to sum answers of “the economy” and “inflation” together to see what is on people’s minds. Then you need to check those answers to the 6 or 7 states that will decide the election.

If Biden Loses the Election, What Will Be the Top Reason?

I discussed the economic aspects in If Biden Loses the Election, What Will Be the Top Reason?

I keep returning to the economy, specifically housing, that will determine the election.

Blacks and those under the age of 35 have been priced out of buying a home. They may vote for Biden anyway, but not in the same percentages as in 2020.

People are upset about immigration nationally, but this is not an national election. What are voters in Pennsylvania, Wisconsin, Michigan, Nevada, North Carolina, and Arizona most concerned about.

In those states, Immigration is only a big issue in Arizona.

Trump Ahead in Swing States

For more on the recent WSJ poll, please see Trump Leads Biden in 6 of 7 Swings States, Pennsylvania is Key

There has not been a single poll suggesting housing specifically.

But call it housing, the economy, or inflation, it all boils sown to the same thing: The economy, in some sense (inflation, real wages, or housing), will decide the outcome, not immigration.

You might be better off than four years ago, and if you own a house you probably are (and then probably view immigration as the top issue).

But it’s the economy that will decide the election in the states that matter.