The often cited British economics online publication Economist.com (The Economist) released an article last Friday November 3rd called A Boost on Jobs. The report quoted the latest unemployment rate of 4.4 and went on to talk about an increase in earnings. The article over-states the annualized October increase in Average Hourly Earnings by a factor of 7. About halfway through the article while describing a Bureau of Labor Statistics report is the following:
“…But the new report contains good news for those ordinary Americans. Average hourly earnings grew more than expected in October, at an annualised pace of nearly 5%.”
The correct answer is “nearly 0.72%” or one-seventh of what Economist.com reported. Do they need to go to math school?
The data in question is available at Bureau of Labor Statistics. Notice that the increase in Average Hourly Earnings for October is 0.06%. The annualized rate would be:
0.06% per month multiplied by 12 months per year = 0.72% per year.
This figure is about one-fifth the average annual rate of inflation, based on the past 12 months, which is approximately 3.5 percent. Put another way, inflation is rising around 5 times faster than Average Hourly Earnings.
The main thrust of the article seems political and aims to show that Republicans have “something to cheer at last.”
Not if you do the math right.
Cross-posted from Sustainable Middle Class