Real Wage Growth Turned Positive on Core CPI in September as Headline CPI Cut Real Pay 0.7%

Real average hourly earnings fell 0.7 percent over the year through September once deflated by the headline CPI, the third straight negative annual print. Strip out food and energy, though, and the same wages rose roughly 0.4 percent against the core index. The September squeeze is an energy shock sitting on a labor market that still pays modestly above core inflation, not a broad wage price spiral, and that distinction matters for what happens at the next Federal Reserve meeting and in the next jobs report.

Key Takeaways Real average hourly earnings fell 0.7 percent year over year in September, the third straight negative annual print, on the 3.7 percent headline CPI. Deflated by the core in…