More on the "growth" of wages (which is below the growth of inflation, and therefore not "growth" at all). Link Regular readers are aware that one of our favorite data series when it comes to demonstrating the quality aspect of the American "recovery" (the quantity is sufficiently taken care of with part-time workers filling in positions without benefits and job security in the New Normal) is that showing the annual average hourly earnings growth in nominal terms, which in November posted the tiniest bounce from its all time low print of 1.2%, rising to 1.3%. The problem as noted above, is that this is nominal wage growth. It therefore excludes the impact of inflation which according to the CPI, rose by 2.2% in October, or, in other words, wage growth was negative in real terms. But it wasn't negative only in October and November. When one takes the Y/Y change in average hourly earnings and subtracts the Y/Y change in CPI one gets a very troubling picture: wages have risen below the rate of inflation for 22 consecutive months, with real wages printing their last positive number back in January 2011 and negative ever since! So how does one explain this disturbing news that nobody reports on for fear it would upend all narrative of a recovery, as one can not have a recovery if real wages have been declining for nearly two years in a row? Bloomberg's Rich Yamarone takes our big picture jobs Quality-vs-Quantity theme, and granularizes it, showing that since the "end" of the Great Recession, the most jobs gained, are those who have had the lowest change in average hourly earnings: His conclusion is sadly spot on: Well, in that case Krugman must be an economist to "know" that consumers can and will spend much more money than they will ever make as long as the US government keep handing it over to them and everyone somehow continues levering up in expectation of the magical "snap" moment, when this too trend of negative real wage growth will reverse just because, and everyone will be perfectly wealthy once again. Because ECON101 said so.