One of the greatest misconceptions plaguing modern economics is that just because there is broad inflation (real, not hedonic, seasonally-adjusted or a burst in Saudi Arabia dumping crude to pressure a Russian default), then nominal, and real, wages also have to increase.

The problem is that without the latter, there can be no actual economic recovery, and instead one ends with stagflation, something Japan is acutely experiencing right now.

Another problem: with nearly one hundred million people out of the labor force, and epic slack within the workforce, there is virtually no amount of inflation in this environment that can force corporations to not only stop firing people (see M&A bubble) but actually hike their pay (except of course for BTFD "traders" at major hedge funds and bank prop desks).

And just to confirm this, alongside the CPI data released earlier which showed the smallest possible broad price increase, when considering that previously the BLS reported flat nominal hourly wages in September, it implied that real wages declined once again. Sure enough, in a separate report today, the BLS announced that real average hourly earnings (in constant 1982-1984 dollars) declined once again, this time from $10.34 to $10.32, a -0.2% drop from past month.

This also means that since March, there has been just one month in which real hourly wages have increased, and that was mostly due to the outright deflationary print the BLS reported last month.

As for the flipside, there have now been 5 outright decreases in real hour wages since March of this year.

Putting America's real wages in context, the $10.34 real hourly wage is at a leve last seen in December 2008, just after Lehman collapsed.