Average Hourly Earnings Spike

The increase in average hourly earnings should be correlated to the CPI. But this spike could be an exception to the rule. The spike is caused by low earners getting out of the work force. Therefore bringing the average earnings higher.

 

Average Hourly Earnings do not confirm Unemployment

As Zero Hedge reports here, the average hourly earnings were going down. That is not consistent with a lower unemployment rate.

Coincidentally, I have a chart on this correlation right here.

And it looks like this:

As you can see, how can the unemployment rate fall (yellow chart) if the average earnings go down (blue chart).

Reason: part time workers and people leaving the labor force.

Wage Inflation Vs. Unemployment Rate

This page is created to monitor the Average Hourly Earnings of Production Vs. Unemployment Rate.

When unemployment declines (yellow chart), wages inflate (blue chart).

Wage Inflation Vs. CPI

This page is created to monitor the Average Hourly Earnings of Production Vs. Consumer Price Index (CPI).

The Average Hourly Earnings (blue chart) are a good indicator for the Consumer Price Index (CPI) (red chart). 

It appears that the CPI is most volatile here, so the important trend to follow is the average hourly earnings.