It's a perk of an improving job market: as more people have found jobs, workers' pay has also sped past the rate of inflation.
Thursday, the Labor Department released data on both earnings and the consumer price index. The figures show workers' hourly pay ticked slightly upward to $23.87 last month and weekly pay was flat, at $821.13. When adjusted for inflation, however, both figures are up significantly from a year ago. Inflation-adjusted hourly pay was up 0.8 percent in April from one year ago. That's an acceleration from March, when hourly pay had grown 0.4 percent year-over year, as well as February's 0.1 percent. Compare that to April 2012, when pay had fallen by 0.3 percent from the prior year.
A slight reduction in hours meant a slower but still significant boost in real weekly pay last month, up 0.5 percent from one year ago.
The boosts in income may signal that slack in the labor market is easing, at least at little. That's the good news. Now the upsetting part.
That's a chart of median, inflation-adjusted weekly earnings during the last 10 years. Deflation helped to push real wages up in late 2008, but pay has altogether not kept pace with inflation since then.
There are also a couple more dampers on the news of growing paychecks. One is that inflation is slow right now – good news for consumers, but also easy for wages to beat.
"Inflation is so low, that the bar to me isn't that great," says Brad Sorensen, director of market and sector research at the Schwab Center for Financial Research. In addition, volatile gas and food prices play a major role in determining the headline inflation figure. That means that when gas prices are falling quickly, as they have recently, it makes "real" pay bigger, though gas prices could easily turn around and spike.
In addition, pay isn't likely to improve equally for all industries.
"It's very uneven," says Steven Cunningham, director of research and education at the American Institute for Economic Research, a Massachusetts-based economics think tank. "We're seeing much more strength in sectors which use more skilled labor: people with degrees and specialized training. That's where you've got the tight labor market."
In other words, engineers, computer programmers and advanced manufacturing workers can have greater control over their pay than retail workers. Less-skilled workers may have to wait for a significant improvement in the labor market before they see their paychecks grow substantially.