By New Deal Democrat
A major piece of data came out last week that has been totally unreported in the media and econoblogosphere: the Consumer Expenditures Survey (CES) for June 2014 - June 2015.
This is the first CES report to include the period of rapidly declining gas prices. And at least on initial examination, to my nerdy eyes, it's a stunner.
The CES income data has been the source of most of the reporting over the last few years indicating that the vast majority of workers have seen a real decline in wages. For example, using the CES data, the NELP reported last August that real wages had declined across the board since the end of the recession in June 2009:
And in a report just a few weeks ago, the Pew Foundation showed the inflation-adjusted CES income and expenditures through June 2014 into this graph:
This has been in stark contrast to the Consumer Population Survey, which is the source of the monthly unemployment rate and labor participation numbers, which has shown an increase since 2013, including a sharp increase in the last 18 months, and virtually all other measures of labor compensation:
According to last year's CES report, from June 2009 through June 2014 median wages had declined -3.9%, as shown in the below chart:
This year's report shows that, as of June 2015, workers had made it all, or virtually all, back. According to my calculations, after falling nearly -7% from June 2009 through June 2014, in 2015 incomes in real terms were only 1% below their 2009 high ($62,138 vs. $62,857 in 2009 dollars). The bullet points:
- average annual expenditures up +5.9% YoY (up +5.7% after inflation)
- average annual income up +6.6% YoY (up +6.4% after inflation)
Here are income and by quintiles as shown in the CES table:
The second lowest quintile continues to be the worst performing quintile, and along with the lowest, is the most affected by the big increases in rent. NOTE: I do not believe these are directly comparable to the NELP's quintiles, since they divide by job category.
I'm still going through the report, and the lengthy disconnect between the two surveys (CES vs. CPS) on income is something I want to examine in more detail. But if my calculations are correct, the CES has now joined the CPS in showing that the economic expansion finally started really benefiting average workers in the last couple of years.