Real Median Weekly Earnings: CPI vs. Chained CPI

The trend in real median weekly earnings looks different depending on deflator.

Figure 1: Median weekly earnings, deflated by CPI (blue), deflated by Chained CPI seasonally adjusted (tan), both in logs, 2010Q4=0. NBER defined peak-to-trough recession dates shaded gray. Chained CPI seasonally adjusted on monthly basis using X-13/X-11. Source: BLS, NBER, and author’s calculations.

Using the CPI, real median weekly earnings in 2022Q3 are slighly lower than they were pre-pandemic, while using the chained CPI, they were slighlty higher.


61 thoughts on “Real Median Weekly Earnings: CPI vs. Chained CPI

  1. Econned

    That’s an interesting take – levels certainly differ but the trends in real median weekly earnings look nearly identical. I’d imagine the slight difference you’ve noted is not statistically significant and almost certainly is not practically significant.

    1. pgl

      I would agree with you as the key term here is slightly:

      ‘Using the CPI, real median weekly earnings in 2022Q3 are slightly lower than they were pre-pandemic, while using the chained CPI, they were slightly higher.’

      But there have been a few of the Usual Suspects here that make a big deal out of slight differences – even when the same people turn around and deny they ever did so.

      1. JohnH

        piggly thinks that it’s a huge success to have real wages regress back to where they were three years ago! Excuse me, but I thought that real wages were supposed to be increasing significantly in a growing economy with a tight labor market. If they can’t increase under those conditions, when can we expect them to grow? Is that a concern of economists? Seems it’s not…they seem to be quite happy when wages stagnate or regress!

        But then again, piggly is a progressive in name only…he’s happy with wages that are back to where they were in 2019!

        1. pgl

          “piggly thinks that it’s a huge success to have real wages regress back to where they were three years ago!”

          I never said that. You know I never said that. Everyone here knows I never said that.

          Dude – you truly have emotional problems. Try getting professional help before your entire family turns their backs on you.

        2. JohnH

          Here’s a great explanation of workers wages, nominal and real, from the FRED blog.

          You’ll notice that usual real weekly earnings are back to where they were in 2019. Worse, the real employment cost index is back to where it was in 2017 when Trump took office. Real weekly earnings are headed that way.

          The growing economy couples with tight labor markets made 2021-2022 a perfect time for real wages to rise. If they rose at all after compositional effects, the increases sure didn’t last.

          But the curious thing is that economists weren’t paying much attention and didn’t notice. It seems that they don’t care much about the average American. But they sure do care about a few tenths of a percent of GDP and presented lots of alternatives to GDP over months!

          pgl may not think that wage stagnation in the midst of an economic expansion and tight labor markets is a big success, but he doesn’t think it’s much of a problem either. Conditions for rising labor income don’t come along very often, and it’s a tragedy that this one ended up being a missed opportunity. Not that pgl cares…

          1. pgl

            “But the curious thing is that economists weren’t paying much attention and didn’t notice. It seems that they don’t care much about the average American.”

            This is a blatant lie and you know it. But you keep repeating it anyway. By now – most economist bloggers would have banned you for such garbage. I guess Dr. Chinn keeps you as one of his stooges for the rest of us to mock. So grow up little troll and stop whining when the grown ups point out that you are a worthless little child.

          2. pgl

            Economists were not paying attention but FRED blog was? It is written by an economist stupid. BTW – there are measures of real median wages as well as real average wages coming from the BLS. When you used the latter in a previous comment average meant mean not median.

            Maybe you should READ this blog post over and over again as you are as usual very confused.

      1. Econned

        Two points,
        1) I don’t think the welfare effect (a real variable) changes based on which deflator (nominal variable) is used.
        2) Menzie’s post is on the (slight) difference between the log of two metrics relative to their pre-pandemic levels.

        1. 2slugbaits

          Econned The welfare effect is not directly observable, which is why we have to measure it with a proxy like median earnings. The choice of the deflator matters a lot if you’re a policymaker. If it didn’t, then there’d be no point in using any deflator. And I think Menzie’s post can have more than one point.

          1. Econned

            Your comment “The choice of the deflator matters a lot if you’re a policymaker. If it didn’t, then there’d be no point in using any deflator.” is an extraordinary jump. At the most basic level, comparing deflator vs deflator is (in most case) entirely different than deflator x vs deflator y. But, to get us back on track, is the difference between the two deflators practically significant to a policy maker? And, more importantly, the differences specifically at 2022Q3 as is the focus of Menzie’s post?

          2. 2slugbaits

            Econned is the difference between the two deflators practically significant to a policy maker?

            If you’re a Social Security trustee I’m pretty sure you would care a which deflator is used to adjust nominal benefits.

          3. Econned

            I don’t think so – at least not practically. Unless trustees are able to change the deflator, it’s all moot. Maybe they care in a “what if” sense, but not in any practical sense. Although there could be something I’m not aware of regarding the ability of trustees to change the deflator of choice but my guess is that’s a legislative process.

        2. pgl

          Your first “point” shows you have not read the research on the issue 2slug has been raising provided by the good economist at BLS. Or maybe you have read it and are choosing to be obtuse.

    2. Macroduck

      You making word salad here? What would statisical significance mean in this situation? Ditto for practical significance? Does government use median income in setting policy? Is it used for making business decisions?

        1. pgl

          Hey – when you learn to actually WRITE clearly (which you have never shown a shred of evidence that you do) then you can taut people on their knowledge of English. When you eventually post a substantive comment (which you have never done) then maybe you can chastise others who do contribute on their statisitics.

          In the meantime the grown ups in the room still realize you are one arrogant but worthless bozo.

    3. Menzie Chinn Post author

      Econned: You’d be wrong, then. Log difference of two series is I(0) according to ADF test. The first difference of deviation is statistically significantly different from zero at 5% msl. Deviation grows about 1% per annum.

      1. Econned

        Menzie Chinn,
        Thanks. That’s interesting.
        So what is your suggestion of the practical significance of one series being “slightly higher” and the other “slightly lower”?

  2. pgl

    Anyone who knows statistics knows median and mean are not the same thing. Which is interesting as two of our trolls are using real mean wages as opposed to using real median wages. Now Bruce Hall is doing this as he is a partisan hack who obeys Kelly Anne Conway’s every command even as he is too dumb to get any of this.

    But why is JohnH using mean over median. After all – he has repeatedly said we should be concerned about the distribution of income. Hey we should and we do even if JohnH falsely tells us that economists do not care about distribution. So his use of mean over median strikes me as being a tad inconsistent.

    1. JohnH

      Sorry, piggly…I use median over and over again.

      In fact, here is one of my frequently referenced data sets, which shows that median usual weekly real earnings are back to 2019 levels, something rarely mentioned by economists here until VERY recently. (which is what led me to comment that economists don’t seem to care about the welfare and well being of average American.)

      Why does pgl insist on lying about what I say all the time?

      1. pgl

        “I use median over and over again.”

        I said you did in the past. I guess you cannot read. Or maybe you do not realize that the real average series you most recently used in a comment was mean not median.

        Look dude – we all know you are incredibly STUPID but DAMN!

        1. JohnH

          pgl thinks that “ Median usual weekly real earnings,” used in my last comment is an average. What an idiot!

          1. pgl

            You did provide data from the BLS that was clearly labeled real average earnings. It was not labeled “median”. And the labels used by BLS do not say “usual”.

            No troll you are the IDIOT,

          2. pgl

            I was not referring to THIS comment dummy. You write so much utter gibberish that I guess you cannot keep up with your own intellectual garbage.

  3. Moses Herzog

    Hope everyone that wanted to vote got out and voted. And maybe even some people who didn’t feel like voting, but wanted to do their civic duty. All of you are small heroes in my eye if you voted today.

    I suppose Chomsky would tell me I am like a child asking for candy (and he’d be correct), but one of my dream fantasies is that Pelosi could be as smart as Noam Chomsky is and have the ability to view the reality of the world, as Chomsky does, instead of signaling virtue and signaling Catholic “righteousness” like she does, and then Democrats would have controlled both floors of Congress years ago and clear to this very day. But she’s too busy playing fantasy faery angel in the mirror. <—this is a 10 minute YT video of Chomsky exchanging views with young people, but the best part is when Chomsky slamdunks on these two children, expressing themselves like they are in their first middle school debate.

    1. Anonymous

      yesterday when i was walking into the polling place, i remembered two kids i grew up with who did not come home from vietnam.

      civic duty.

      being an old man.

        1. pgl

          You have the RIGHT to post substantive comments here. Some might say you have the DUTY to do so as well but of course have not so far and likely never will.

    2. Barkley Rosser


      Oh, there you go again with your sick vendetta against Pelosi.

      Dems have a problem in the Senate because of there being a lot of rural states with lots of GOPs against them with most of the Dems in a smaller number of large states like California.

      As doe House, there has long been a major problem of gerrymandering in a lot of states where the legislatures are conrrolled by GOPs. This may not be woreking for them now, but it has in the past. Dem problems in not being able to hold as many seats in either house compared to the national vote has had nothing to do with anything Peoloi has done, whether eating fancy ice cream or engagin in “signaling Catholic ritheousness.”

      Sheesh, must we add to your sick sexism and apparent homophobia and anti-Catholic bias as well? More yikes.

  4. pgl

    Different topic but important, Kevin Drum provides some key information on “leverage” from a recent FED report:

    Leverage simply put is how much of a bank’s assets are financed by equity. Remember those 1980’s S&L days? Well I’m sure you remember the financial meltdown that had a lot to do with the Great Recession. Leverage fell below 5% which ideally it should be at least 10%. It seems leverage did recover for a long while but is slipping of late.

  5. JohnH

    Harold Meyerson, American Prospect: “ Now, in the closing weeks of the campaign, Democrats are finally recasting their messaging to the price of gas, the price of drugs, the Republicans’ threats to Social Security and Medicare and the like. Perhaps this will work. My fear, however, is that it may well be



    Lots of people are castigating the Fed for raising interest rates, which would hurt workers and quickly regress wages to early Obama era levels (wage depression?) However, hardly anyone is castigating Corporate America for raising prices faster than their costs, which is a big reason we have this level of inflation in the first place and why the Fed had to react and to raise rates. Why let Corporate America off the hook for what amounts to robbery? (Of course, the vast majority of economists, as documented in an IGM survey, don’t think that corporations bear any responsibility for inflation!!!)

    As for Democrats’ inability to seize on an obvious economic issue, well, that’s par for the course and symptomatic of why they lost the working class.

    1. pgl

      So you actually think Dr. Oz represents the working class. Fetterman is the projected winner as it should be but your boy from New Jersey is claiming he won.

      1. JohnH

        How does piggly ever come to the notion that I support Oz? Typical misrepresentation. It happens all the time.

        1. pgl

          No troll – I noted how you dismissed all Democrats. Fetterman won by speaking for the working class. Ryan ran in Ohio representing the working class. So your little suggestion that all Democrats are bought and paid for by Wall Street is just not true.

          But as usual – you will weasel out of this one too. It is what you do.

    2. Barkley Rosser


      It has been noted here previously that a portion of that decline in real wages, especially in the early stages of it, was a compositional effect. During the pandemic a bunch of that increase in real wages was a disproportionate number of low wage people getting laid off. As the economy rebounded, the opposite happened, and the rehiring of those low wage people lowered both mean and median real wages.

      1. pgl

        Dr. Chinn has made this point as have a lot of economists. Of course JohnH refuses to believe that economists address these matters so he lives in his own incredibly ignorant world.

    3. Barkley Rosser

      Well, JohnH, even though you got all dramatic with your “TOOOO…. LATE,” turns out Dems did not do as badly as you clearly thought they would. Another thing you have been wrong about.

  6. Moses Herzog

    “FiveThirtyEight” live blog is a good place to hang out tonight. Especially if you’re like me and you’ve had what feels like about 3 full lifetimes worth of idiotic TV broadcast anchor banter. I don’t need to see their obvious veneers, caps and listen to buffoon convo. Just tell who the hell is winning, and the party dominance of the districts not yet counted. TV news broadcasters can phone their Mom after work and tell her their best knock knock jokes and bad puns, and how they’re too dumb to figure out the heater control knobs in the car every morning. After work Lester Holt can tell his wife for the 20th time those people at the North Korean ski resort really did look like real paying customers. It’s not “news” for me.

    Not me, I’ll be at “538” blog tonight.

  7. Moses Herzog

    As of 20:41 cst tonight, Repubs need about 35 more House seats to gain control. Senate tied 40-40. With some very smart people giving JD Vance the win tonight in Ohio.

    JD Vance “projected winner” = Vomit

    1. Moses Herzog

      In the “good news” dept, not much talk of guns or violence at polling stations. But it remains to be seen how that will go when they start tabulating in places like Arizona where Kari Lake is openly encouraging polling station violence and hate towards journalists.

      Kari Lake is like donald trump—becoming an antiChrist like creature. The type of person one imagines “lizard people” rumors being born of. I assume Lake eats live rodents as later night snacks.

        1. Moses Herzog

          I’m having problems with MSN links right now, for I do not know what only God knows reason. I can imagine a rough idea. I would say the most interesting facet of this, is that after 7+ years of being up to his neck in national politics, the orange bastard still has problems with staff leaks. This is “The VSG”??~~Very Stable Genius?? How can he not even laugh at himself when he claims that crap.

          At the peak of Watergate, after 5 straight shot whiskeys Nixon had more self-awareness than this burnt orange oaf.

      1. Moses Herzog

        @ pgl
        First openly lesbian to win Governor. I read Healey might share that distinction with an Oregon candidate but hadn’t checked out the Oregon numbers yet. So many western states still counting votes.

        My recent question here (and this is not totally rhetorical, it’s an actual question), should I feel guilty eating/drinking Dunkin Donuts products now because they are breaking child labor laws specific to the state (more strict than national laws) of Massachusetts?? And what does proud Massachusetts resident Kopits have to say about Dunkin Donuts breaking state child labor laws?? I mean since MAGAs are “law and order” types……

        1. pgl

          There is a Dunkin Donuts franchise across the street from my gym. I have not been in there since the pandemic. My understanding (I could be wrong) is that all of these are third party franchisees. But a franchisor still can dictate decency in business practices to its third party franchisees. I saw the big boys of McDonald’s slam some weirdo running 3 shops in my home town when I was still in school.

          Yea I paid for college flipping burgers. BTW – after the company took over his 3 stores, I got a job as first assistant at another McDonald’s where my excellent boss was gay. He also drank his coffee with an insane amount of sugar.

    2. pgl

      Tim Ryan did run on representing the working class (some here want to pretend Democrats never do this but hey) and he still lost. Vomit indeed.

      I’m listening to the cable news babble speak at 5am. The claim of a Red Wave may not turn out but Democrats may still have to deal with Speaker McCarthy.

      It seems Warnock will get more votes that Lindsey Graham’s “boy” but alas not 50% so a Georgia runoff. OK ladies – get the word out on how Hershel has been a terrible dad.

  8. Moses Herzog

    All the Wisconsin made lemonade, cheese, and Bavarian sauerkraut I purchased finally paid off. Not to mention Andes Mints and Miller High Life. You know how hard it is to find these products in illiterate red dirt land?? And that’s not even counting when my check out clerk is being used as a bodily shield against the hubby of a domestically abused misguided Okie chick. What do I look like~~Howling Mad Murdock of the A-Team!?!?!?! My hairline maybe. Now I want my free campaign T-shirt from Evers.

  9. Moses Herzog

    This will probably change some as we go into the early morning Wednesday hours and maybe into the early afternoon. But I think it’s hard to deny, this puts a pretty big dent into the Orange Abomination’s armor.

    Neither the endorsement, nor the parroting of donald trump bullet points carries the weight a lot of theses moronic Republicans gave freely to donald trump, simply by default. Are Republicans going to continue on giving this orange monkey power that he does not indeed have??

    1. pgl

      Trump told a reporter: (1) he will take all the credit whenever one of his candidates win; (2) he will take none of the blame when one of his candidates loses, I’m surprised the reporter did not fall on her face laughing at this stupidity.

  10. pgl

    Of all the disgusting garbage from Donald Trump this may the worst:

    An explosive new book entitled “The King: The Life of Charles III” by Christopher Andersen is reinvigorating allegations that Donald Trump tried to date Princess Diana after her 1996 divorce from Prince Charles. The biography claims that Trump “aggressively pursued” the People’s Princess but was rejected. But this is not the first time, we’ve heard about his fascination with Lady Di.

    Of course Lady Di rejected the fat ugly egotistical womanizer. But Trump ran around claiming he could have had her. GAG!

  11. Moses Herzog

    If Masto loses in Nevada, that’s a HUGE loss for Democrats. She had the blessings of no-longer-with-us Harry Reid. There’s ZERO reason Masto should have lost, unless she pulled a Hillary Clinton style “I wouldn’t know an efficient political campaign from elephant dung” clusterf***

    1. Barkley Rosser

      Dump some hours ago out of Clark County (where Las Vegas is) cut Laxalt’s lead, with most of the uncounted votes from there. It looks that if the margin in that dump holds for the rest of the uncounted holds, she will in the end defeat him, meaning we shall not havt nail bit over the Georgia runoff.

      1. Barkley Rosser

        And in the end that is what happened, with Cortez taking it by 6000.

        In the meantime, Lake’s frothing at the mouth is getting worse and worse as Hobb’s lead seems to be holding or even increasing maybe.

      1. Moses Herzog

        Hahahahaha, I have confessed on here before that back in 2008 I thought circa 2008 Palin was an attractive, well-built woman. Her politics and soul are another matter.

        What we rarely hear about McCain in this rush for revisionist history after his very enjoyable but self-serving thumbs down on the Senate floor, is that John McCain was a typical military man in that he was a tomcat supreme, and unceremoniously dumped his first wife, who waited dutifully for the bastard while he was stuck in Vietnam. He was thinking with a certain bodily appendage when he chose Palin, not his brain.

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