Real average weekly earnings fell 0.2% from November to December after seasonal adjustment, according to preliminary data released today by the Labor Department's Bureau of Labor Statistics. The decline was due to the combined effect of a 0.3% rise in the Consumer Price Index (CPI) and a 0.1% increase in average weekly earnings.

The November change in real average weekly earnings was revised downward from -0.4% to -0.7%.

Data on average weekly earnings are collected from the payroll reports of private nonfarm establishments. Earnings of both full-time and part-time workers holding production or nonsupervisory jobs are included. Real average weekly earnings are calculated by adjusting earnings in current dollars for changes in the CPI.

Average weekly earnings rose by 2.2% between December of 1994 and 1995 as a result of a 3.1% increase in average hourly earnings and a 0.9% decline in average weekly hours. However, after adjustment for a 2.5% gain in the CPI over the same period, real average weekly earnings fell by 0.3%. Thus, in the past year, worker earnings increases have not even kept pace with the modest rise in the cost of living.

Byline: Lafferty (MF Merlin)