Average Hourly Earnings Are A Poor Measure of Labor Compensation
​Average hourly earnings were a major focus in the last employment report (and contributed to an incorrect assessment of the likelihood of a March rate hike by many market participants and commentators). We suspect this will again be an area of interest in tomorrow's jobs report for February. However, average hourly earnings growth i) is a lagging indicator of the labor market, ii) is a poor measure of labor compensation and iii) has received more attention than we think is fitting in recent years.
RDQ Economics provides global macroeconomic consulting services with an emphasis on U.S. economic fundamentals and monetary policy.
Our views are driven by consistent application of classical economic and monetary principles and has generated superior anticipation of changes in the stance of monetary policy and of movements in economic growth and inflation.
The founders of RDQ Economics, John Ryding and Conrad DeQuadros, have a combined experience of 26 years on Wall Street, 12 years of experience in central banking at the Federal Reserve and the Bank of England and nine years in the independent research space. John and Conrad have worked closely with fixed income, foreign exchange, and equity traders and portfolio managers, which has enabled their analysis and advice to be tailored to a clientele that is focused on trading and investment decisions.
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