Average Hourly Earnings vs CPI
Live side-by-side comparison with current values, changes, and key statistics.
Why This Comparison Matters
When wages grow faster than CPI, real wages are rising and consumers have increasing purchasing power, supporting spending. When CPI outpaces wages, real wages are falling, consumers feel poorer despite nominal pay raises, and sentiment deteriorates. The Fed watches this closely for signs of a wage-price spiral, where rising wages cause higher prices, which cause demands for even higher wages.
Cross-Asset Analysis
To orient the reader: Avg Hourly Earnings (Private) represents average hourly earnings for all private employees, wage growth tracker and CPI (All Urban) represents consumer Price Index for all urban consumers, the headline inflation gauge, which is why this comparison sits in the cross asset pair category on Convex. Cross-asset pairs like Avg Hourly Earnings (Private) compared with CPI (All Urban) expose the macro variables that traverse asset classes: liquidity, inflation, real rates, and risk appetite. Liquidity-driven phases produce cross-asset alignment in Avg Hourly Earnings (Private) and CPI (All Urban); fundamentals-driven regimes produce decoupling.
The bridge between Avg Hourly Earnings (Private) and CPI (All Urban) runs through shared macro drivers, and isolating the spread separates common factors from idiosyncratic noise. Name-specific shocks in either Avg Hourly Earnings (Private) or CPI (All Urban) produce spread moves unrelated to the shared macro story. Watching Avg Hourly Earnings (Private) together with CPI (All Urban) gives insight into how macro factors propagate across different parts of the global market structure.
Avg Hourly Earnings (Private) belongs to the Labor Market space, while CPI (All Urban) belongs to Inflation, and the interaction between those two worlds is where the interesting macro information lives. Cross-asset flows track macro regime changes with typical lags, which is why spreads like Avg Hourly Earnings (Private)-CPI (All Urban) often lead coincident indicators.
90-Day Statistics
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Frequently Asked Questions
What is the relationship between Avg Hourly Earnings (Private) and CPI (All Urban)?+
Avg Hourly Earnings (Private) and CPI (All Urban) are connected through shared macro drivers across asset classes. When the dominant macro driver shifts, both respond, though with different sensitivities and at different speeds. The spread between Avg Hourly Earnings (Private) and CPI (All Urban) captures the specific macro signal that flows through this relationship.
When does Avg Hourly Earnings (Private) typically lead CPI (All Urban)?+
Avg Hourly Earnings (Private) tends to lead CPI (All Urban) during macro regime changes, where the more liquid asset moves first. In those periods, moves in Avg Hourly Earnings (Private) precede corresponding moves in CPI (All Urban) by days to weeks, depending on the transmission channel and the depth of each market.
How are Avg Hourly Earnings (Private) and CPI (All Urban) historically correlated?+
Long-run correlation between Avg Hourly Earnings (Private) and CPI (All Urban) varies by regime. Cross-asset correlations vary by regime, tending to tighten in stress and loosen during normal conditions. The correlation is not stable: it shifts with macro conditions, and the periods when it breaks down are often the most informative moments in the Avg Hourly Earnings (Private)-CPI (All Urban) relationship.
What macro conditions drive divergence between Avg Hourly Earnings (Private) and CPI (All Urban)?+
Divergence between Avg Hourly Earnings (Private) and CPI (All Urban) typically arises from idiosyncratic shocks in one asset, policy interventions, or structural shifts in demand. When one asset's idiosyncratic drivers dominate, the spread moves in ways that the common macro story does not predict, which is usually a signal to look more carefully at the specific drivers at work in Avg Hourly Earnings (Private) or CPI (All Urban).
Is Avg Hourly Earnings (Private) a hedge for CPI (All Urban)?+
Cross-asset hedges between Avg Hourly Earnings (Private) and CPI (All Urban) work when the macro drivers of the two assets are sufficiently decorrelated, which depends on the regime and therefore needs to be reviewed as conditions change. Effective hedging requires matching the hedge to the specific risk being protected, and the Avg Hourly Earnings (Private)-CPI (All Urban) pair is best stress-tested under scenarios the investor most worries about before being sized into a real portfolio.
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Data sourced from FRED, CoinGecko, CBOE, and other providers. This page is for informational purposes only and does not constitute financial advice. Past performance does not guarantee future results.