By now, you probably already know that the government released a very discouraging unemployment report for June on Friday morning. Few jobs were created and the rate ticked up to 9.2%. But the Bureau of Labor Statistics also includes how wages change in their monthly report. This statistic isn't as exciting and flash as jobs, so it doesn't get as much attention. But when a recovery is dependent on spending, wages are arguably just as important: if they aren't rising, people won't be eager to spend more. If you look at how real hourly earnings have changed throughout 2011, you begin to see one reason why the recovery is sputtering.
Below, you'll find a chart showing the BLS statistics for average weekly earnings. I have adjusted all months for inflation based on May 2011 dollars, except for June -- since the month's inflation data isn't available yet. Presumably, however, there was some inflation in June, so if anything, it will make the current wages look even lower on a relative scale.
What this chart really shows is the purchasing power of the average American. Even though wages had generally increased since last fall, inflation has risen faster. So after peaking in October, purchasing power has steadily declined. As I noted in my analysis of the unemployment report, Americans experienced a particularly dramatic $2.64 earnings decline in June -- even before adjusting for inflation.