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Technical information: (202) 606-6555 Media contact: 606-5902 USDL 96-475 WIRE EMBARGO UNTIL 10:00 A.M. (EST) THURSDAY, NOVEMBER 14, 1996 REAL EARNINGS IN OCTOBER 1996 Real average weekly earnings fell by 1.5 percent from September to October after seasonal adjustment, according to preliminary data released today by the Bureau of Labor Statistics of the U.S. Department of Labor. This decline is attributed to a 1.2 percent decrease in average weekly hours and a 0.3 percent rise in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Average hourly earnings were unchanged in October. Data on average weekly earnings are collected from the payroll reports of private nonfarm establishments. Earnings of both full-time and part-time workers holding production or nonsupervisory jobs are included. Real average weekly earnings are calculated by adjusting earnings in current dollars for changes in the CPI-W. Average weekly earnings rose by 2.4 percent between October of 1995 and 1996 before seasonal adjustment as a result of a 3.0 percent increase in average hourly earnings and a 0.6 percent decrease in average weekly hours. After adjustment for a 3.0 percent gain in the CPI-W over the same period, real average weekly earnings declined by 0.6 percent. Before adjustment for seasonal change and deflation by the CPI-W, average weekly earnings were $412.28 in October 1996, compared with $402.52 a year earlier. ___________________________ Real Earnings for November 1996 will be released on Thursday, December 12, 1996. Table A. Composition of change in real earnings of production or nonsupervisory workers on private nonfarm payrolls ________________________________________________________________________ | | | | | | Average | Average | Average | The | Real | hourly | weekly | weekly | Consumer | average Year | earnings | hours | earnings | Price | weekly and | | | | Index1/ | earnings month |___________|___________|___________|___________|___________ | | Percent change from preceding month, seasonally adjusted ____________|___________________________________________________________ | | | | | 1995: | | | | | Oct. | 0.3 | 0.3 | 0.6 | 0.3 | 0.2 Nov. Dec. 1996: Jan. Feb. Mar. Apr. May June July Aug. Sept.p Oct.p | .3 | -.3 | .1 | .1 | (2) | .2 | -.3 | -.1 | .2 | -.3 | | | | | | .1 | -1.5 | -1.4 | .4 | -1.8 | .3 | 2.1 | 2.3 | .2 | 2.1 | .3 | .0 | .3 | .5 | -.2 | .3 | -.6 | -.2 | .4 | -.6 | .2 | -.3 | -.1 | .3 | -.4 | .8 | 1.5 | 2.2 | .1 | 2.2 | -.2 | -1.4 | -1.6 | .2 | -1.8 | .5 | .6 | 1.1 | .1 | 1.0 | .3 | .9 | 1.2 | .3 | .9 | .0 | -1.2 | -1.2 | .3 | -1.5 |___________________________________________________________ | | Percent change from same month a year ago, not seasonally | adjusted |___________________________________________________________ | | | | | 1995: | | | | | Oct. | 2.9 | -0.9 | 2.0 | 2.7 | -0.6 Nov. | 2.9 | -.6 | 2.3 | 2.4 | -.1 Dec. | 3.0 | -.9 | 2.1 | 2.5 | -.4 1996: | | | | | Jan. | 3.2 | -2.9 | .2 | 2.6 | -2.5 Feb. | 3.0 | -.3 | 2.7 | 2.6 | (2) Mar. | 3.1 | .0 | 3.1 | 2.8 | .3 Apr. | 3.2 | -.6 | 2.6 | 2.9 | -.3 May | 3.3 | .3 | 3.6 | 2.9 | .6 June | 3.7 | .9 | 4.6 | 2.8 | 1.8 July | 3.1 | -.6 | 2.5 | 2.9 | -.4 Aug. | 3.5 | .0 | 3.5 | 2.9 | .7 Sept.p | 3.5 | .9 | 4.4 | 3.0 | 1.4 Oct.p | 3.0 | -.6 | 2.4 | 3.0 | -.6 ____________|___________|___________|___________|___________|___________ 1/ The deflator for the constant-dollar series presented in this release is the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). 2 Less than 0.05 percent. p = preliminary. Table 1. Earnings of production or nonsupervisory workers on private nonfarm payrolls in current and constant dollars1/ by industry, not seasonally adjusted ____________________________________________________________________ | | Average hourly earnings |_________________________________________ | | | | Industry | | | | Percent | Oct. | Sept.| Oct. | change | 1995 | 1996p| 1996p| Oct. 1995 | | | | Oct. 1996 __________________________|________|________|________|______________ | | | | Total private:2/ | | | | Current dollars..........| $11.60 | $11.96 | $11.95 | 3.0 Constant (1982) dollars..| 7.45 | 7.47 | 7.45 | .0 | | | | Goods-producing: | | | | Current dollars..........| 13.20 | 13.67 | 13.63 | 3.3 Constant (1982) dollars..| 8.47 | 8.54 | 8.49 | .2 | | | | Mining: | | | | Current dollars..........| 15.34 | 15.72 | 15.52 | 1.2 Constant (1982) dollars..| 9.85 | 9.82 | 9.67 | -1.8 | | | | Construction: | | | | Current dollars..........| 15.34 | 15.75 | 15.74 | 2.6 Constant (1982) dollars..| 9.85 | 9.84 | 9.81 | -.4 | | | | Manufacturing: | | | | Current dollars..........| 12.43 | 12.90 | 12.84 | 3.3 Constant (1982) dollars..| 7.98 | 8.06 | 8.00 | .3 | | | | Service-producing: | | | | Current dollars..........| 11.04 | 11.38 | 11.38 | 3.1 Constant (1982) dollars..| 7.09 | 7.11 | 7.09 | .0 | | | | Transportation and public | | | | utilities: | | | | Current dollars..........| 14.46 | 14.62 | 14.60 | 1.0 Constant (1982) dollars..| 9.28 | 9.13 | 9.10 | -1.9 | | | | Wholesale trade: | | | | Current dollars..........| 12.55 | 12.99 | 12.89 | 2.7 Constant (1982) dollars..| 8.06 | 8.11 | 8.03 | -.4 | | | | Retail trade: | | | | Current dollars..........| 7.77 | 8.06 | 8.12 | 4.5 Constant (1982) dollars..| 4.99 | 5.03 | 5.06 | 1.4 | | | | Finance, insurance, | | | | and real estate: | | | | Current dollars..........| 12.53 | 12.89 | 12.86 | 2.6 Constant (1982) dollars..| 8.04 | 8.05 | 8.01 | -.4 | | | | Services: | | | | Current dollars..........| 11.54 | 11.90 | 11.92 | 3.3 Constant (1982) dollars..| 7.41 | 7.43 | 7.43 | .3 __________________________|________|________|________|______________ See footnotes at end of table. Table 1. Earnings of production or nonsupervisory workers on private nonfarm payrolls in current and constant dollars1/ by industry, not seasonally adjusted - Continued ____________________________________________________________________ | | Average weekly earnings |_________________________________________ | | | | Industry | | | | Percent | Oct. | Sept.| Oct. | change | 1995 | 1996p| 1996p| Oct. 1995 | | | | Oct. 1996 __________________________|________|________|________|______________ | | | | Total private:2/ | | | | Current dollars..........|$402.52 |$417.40 |$412.28 | 2.4 Constant (1982) dollars..| 258.36 | 260.71 | 256.87 | -.6 | | | | Goods-producing: | | | | Current dollars..........| 546.48 | 570.04 | 565.65 | 3.5 Constant (1982) dollars..| 350.76 | 356.05 | 352.43 | .5 | | | | Mining: | | | | Current dollars..........| 696.44 | 721.55 | 713.92 | 2.5 Constant (1982) dollars..| 447.01 | 450.69 | 444.81 | -.5 | | | | Construction: | | | | Current dollars..........| 615.13 | 625.28 | 626.45 | 1.8 Constant (1982) dollars..| 394.82 | 390.56 | 390.31 | -1.1 | | | | Manufacturing: | | | | Current dollars..........| 518.33 | 545.67 | 538.00 | 3.8 Constant (1982) dollars..| 332.69 | 340.83 | 335.20 | .8 | | | | Service-producing: | | | | Current dollars..........| 362.11 | 375.54 | 372.13 | 2.8 Constant (1982) dollars..| 232.42 | 234.57 | 231.86 | -.2 | | | | Transportation and public | | | | utilities: | | | | Current dollars..........| 574.06 | 590.65 | 584.00 | 1.7 Constant (1982) dollars..| 368.46 | 368.93 | 363.86 | -1.2 | | | | Wholesale trade: | | | | Current dollars..........| 483.18 | 501.41 | 493.69 | 2.2 Constant (1982) dollars..| 310.13 | 313.19 | 307.60 | -.8 | | | | Retail trade: | | | | Current dollars..........| 223.78 | 234.55 | 233.86 | 4.5 Constant (1982) dollars..| 143.63 | 146.50 | 145.71 | 1.4 | | | | Finance, insurance, | | | | and real estate: | | | | Current dollars..........| 456.09 | 470.49 | 455.24 | -.2 Constant (1982) dollars..| 292.74 | 293.87 | 283.64 | -3.1 | | | | Services: | | | | Current dollars..........| 376.20 | 387.94 | 385.02 | 2.3 Constant (1982) dollars..| 241.46 | 242.31 | 239.89 | -.7 __________________________|________|________|________|______________ 1/ The deflator for the constant-dollar series presented in this release is the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). 2/ Data relate to production and related workers in mining and manufacturing; construction workers in construction; and nonsupervisory workers in transportation and public utilities, trade, finance, insurance, and real estate, and services. Included in this group are approximately four-fifths of all jobs on private industry payrolls. p = preliminary. Table 2. Earnings of production or nonsupervisory workers on private nonfarm payrolls1/, seasonally adjusted _________________________________________________________________________ | | | | | Average hourly | Average weekly | earnings | earnings | | Year |_____________________________|_____________________________ and | | | | month | | | | | Current | Constant | Current | Constant | dollars | (1982) | dollars | (1982) | | dollars2/ | | dollars2/ | | | | _____________|______________|______________|______________|______________ | | | | 1995: | | | | Oct. | $11.55 | $7.42 | $398.48 | $255.93 Nov. | 11.59 | 7.44 | 398.70 | 255.91 Dec. | 11.61 | 7.44 | 398.22 | 255.11 1996: | | | | Jan. | 11.62 | 7.41 | 392.76 | 250.48 Feb. | 11.65 | 7.42 | 401.93 | 255.84 Mar. | 11.68 | 7.40 | 402.96 | 255.36 Apr. | 11.72 | 7.40 | 402.00 | 253.79 May | 11.74 | 7.39 | 401.51 | 252.68 June | 11.83 | 7.44 | 410.50 | 258.18 July | 11.81 | 7.41 | 403.90 | 253.55 Aug. | 11.87 | 7.45 | 408.33 | 256.17 Sept. p | 11.91 | 7.45 | 413.28 | 258.46 Oct. p | 11.91 | 7.43 | 408.51 | 254.68 _____________|______________|______________|______________|______________ 1/ See footnote 2, table 1. 2/ The deflator for the constant-dollar series presented in this release is the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). p = preliminary. Explanatory Note The earnings series presented in this release are derived from the Bureau of Labor Statistics monthly establishment survey of employment, payroll, and hours. The deflator used for constant-dollar earnings series presented in this release is derived from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Earnings series from the monthly establishment series are estimated arithmetic averages (means) of the hourly and weekly earnings of all production or nonsupervisory jobs in the private nonfarm sector of the economy. Average hourly earnings estimates are derived by dividing the estimated industry payroll--for all production or nonsupervisory jobs-by the corresponding paid hours. Average weekly hours estimates are similarly derived by dividing estimated aggregate hours by the corresponding number of production or nonsupervisory jobs. Average weekly earnings estimates are derived by multiplying the average hourly earnings and the average weekly hours estimates. This is equivalent to dividing the estimated payroll by the number of production or nonsupervisory jobs. The weekly and hourly earnings estimates for aggregate industries, such as the major industry division and the total private sector averages printed in this release, are derived by summing the corresponding payroll, hours, and employment estimates of the component industries. As a result, each industry receives a "weight" in the published averages that corresponds to its current level of activity (employment or total hours). This further implies that fluctuations and varying trends in employment in high-wage versus low-wage industries as well as wage rate changes influence the earnings averages. There are several characteristics of the series presented in this release that limit their suitability for some types of economic analyses. (1) The denominator for the weekly earnings series is the number of private nonfarm production or nonsupervisory worker jobs. This number includes full-time and part-time jobs as well as the jobs held by multiple jobholders in the private nonfarm sector. These factors tend to result in weekly earnings averages significantly lower than the corresponding numbers for full-time jobs. (2) Annual earnings averages can differ significantly from the result obtained by multiplying average weekly earnings times 52 weeks. The difference may be due to factors such as turnovers and layoffs. (3) The series are the average earnings of all production or nonsupervisory jobs, not the earnings average of "typical" jobs or jobs held by "typical" workers. Specifically, there are no adjustments for occupational, age, or schooling variations or for household type or location. Many studies have established the significance of these factors and that their impact varies over time. Seasonally adjusted data (table 2) are preferred by some users for analyzing general earnings trends in the economy since they eliminate the effect of changes that normally occur at the same time and in about the same magnitude each year and, therefore, reveal the underlying trends and cyclical movements. Changes in average earnings may be due to seasonal changes in the proportion of workers in high-wage and lowwage industries or occupations or to seasonal changes in the amount of overtime work, and so on. For more information, see Thomas Gavett, "Measures of Change in Real Wages and Earnings," Monthly Labor Review, February 1972. Information in this release will be made available to sensory impaired individuals upon request. Voice phone: 202-606-STAT; TDD phone: 202606-5897; TDD Message Referral Phone Number: 1-800-326-2577.