Question: Each month the Current Employment Statistics (CES) program surveys numerous businesses and government agencies in order to obtain detailed data on earnings of workers. Consider

Each month the Current Employment Statistics (CES) program surveys numerous businesses and government agencies in order to obtain detailed data on earnings of workers. Consider the following data on the national average of hourly earnings for 2008. Also included is the corresponding consumer price index for 2008.

a. Use the CPI to deflate the national average of hourly earnings.
b. Compute the percentage change in the nominal as well as real hourly earnings in 2008.
c. Were consumers getting better off over 2008? Explain.

Month Earnings CPI Month Earnings CPI January 21.25 173.3 July 21.66 183.7 February21.29173.9 Augst21.4181.9 March21.4375.8 September 21.80 182.0 April May June 21.43 176.5 October 21.52 178.8 November 21.93 172.3 21.60 181.5 December 21.96 169.4 21.84 177.3

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