Pay Attention to Average Hourly Earnings This Week

One Big Missing Piece in the U.S. Labor Market Recovery

On Friday we get the March Non-Farm Payrolls report. Economists are looking for 245K new jobs and for the unemployment rate to hold steady at 5.5 percent.

Those two numbers will grab the headlines, but another number that economists will be watching closely is the Average Hourly Earnings number. Economists are expecting a sequential rise of 0.2 percent from the month before, a slight acceleration from February's 0.1% pace of gains.

But even if this number is matched, it represents an ongoing, disappointing trend. Despite a labor market that seems to be getting tighter, wage growth remains quite unimpressive. The lack of wage growth has implications for broader policy. While an acceleration in wages is not a pre-condition for rate hikes, Fed Chair Janet Yellen has said that if there are any indications of backsliding on this measure, then that could be a reason for delaying hikes.

So while most people will be focused on the big, headline numbers, this is an important facet not to be overlooked.

For more, read this QuickTake: Monthly U.S. Jobs Report

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