Average Hourly Earnings in CPI deflated 2025$:

Figure 1: Average hourly wage in CPI deflated 2025$ (bold black), Using Cleveland Fed nowcast (gray), using Bloomberg consensus (light blue ), all on log scale. Source: BLS, Cleveland Fed accessed 4/7, Bloomberg, and author’s calculations.

It all looks a lot worse if one uses the AIER’s “Everyday Price Index”.

Figure 2: AIER Everday Price Index (bold black), estimated using first differenced headline CPI, Cleveland Fed nowcast, over 2023m05-2026M03 period (teal), +/- 2 se band (gray lines). Source American Institute for Economic Research, author’s calculations.

Using the AIER EPI, we were better off in 2024M12…