What is Average Hourly Earnings?
Average Hourly Earnings (AHE) month-over-month (m/m) is an economic indicator that measures the change in the average hourly income of employees in a given month compared to the previous month. It is typically expressed as a percentage and serves as an important indicator for understanding wage inflation and the overall economic condition.
Measurement: It is a measure of the average wages employees earn per hour of work, comparing one month to the previous month.
Wage Inflation Indicator: An increase in AHE indicates rising wages, which may signal wage inflation. Higher wages can lead to increased consumer spending but may also contribute to overall inflation if businesses raise prices to offset higher labor costs.
Economic Health: Rising average hourly earnings may signal a strong labor market with high demand for workers, while stagnant or declining earnings could indicate economic weakness or a labor surplus.
Impact on Monetary Policy: Central banks, such as the Federal Reserve, monitor AHE as part of their economic assessment to make decisions regarding interest rates and monetary policy.
Data Release: The U.S. Bureau of Labor Statistics (BLS) releases AHE data as part of the Employment Situation Report, commonly known as the Non-Farm Payroll report, which is typically published on the first Friday of each month.
Percentage Figures
0% to 0.5% – Modest Wage Growth: Indicates a slight increase in average hourly earnings, which may reflect a stable economy and mild inflationary pressure. This is generally seen as a sign of a steady labor market.
Impact on Gold & the US Dollar
If the figures come out higher than expected, it is positive for the US dollar.
But if they come out lower than expected, gold tends to rise.
