The U.S. Bureau of Labor Statistics recently reported that real average hourly earnings were up by 1.3 percent in the 12 months ending March 2019. This is smaller than February’s 1.9 percent increase in earnings, but is still good news. Since the length of the average workweek remained unchanged, real weekly earnings increased at the same rate as real hourly earnings (1.3 percent).
Real hourly earnings have been increasing by over 1 percent in year-over-year gains since November of last year. The last time that real earnings decreased by more than 0.1 percent was a while ago, October 2012.
While 1.3 percent might not seem very good, too much of an increase in real earnings can be indicative of a recession. Real hourly earnings were having more than 4 percent increases in the months leading up to the 2009 recession. Since the economy recovered, real earnings haven’t gone over 2.5 percent in any given month. Small increases in real earnings show that employees are getting paid more (even after adjusting for inflation) but aren’t nearing a recession anytime soon.