Average Hourly EarningsAHE
Average hourly earnings measure the average wage per hour for a group of workers. In the US the figure is released with the monthly jobs report and is watched as a sign of wage-driven inflation.
Average hourly earnings (AHE) is the US wage figure released with the monthly jobs report. Traders watch it as a sign of wage pressure that can feed into Inflation and shape Federal Reserve policy.
- Category
- Fundamentals and Macroeconomics
- Reading time
- 3 min
- Also called
- AHE, Hourly earnings, Wage growth (payrolls)
- Updated
Average hourly earnings in plain words
For all employees, average hourly earnings is total pay divided by total hours worked.1
The private-sector data come in two series: one for all employees and one for production and non-supervisory staff.2
The numbers come from payrolls, so someone with two jobs counts twice — the figure describes jobs, not people.2
How to read the AHE release
Find the headline
Look at the monthly and year-over-year change in AHE for all private employees.
Know the formula
For all employees, divide total payroll by total hours.1
Check the second series
For production and non-supervisory workers, do the same using only that group's payroll and hours.1
Compare with expectations
Markets react to the surprise versus forecasts.
Watch for mix effects
Because the count is by job, a change in which kinds of jobs are being added can shift the average.2
Cross-check
Compare with the Atlanta Fed tracker, which takes the median change in hourly pay for the same people a year apart.3
Worked examples
Example 1 — Computing AHE
$30.00/hourA hypothetical economy has weekly payroll of $3,000,000 and 100,000 hours.
| Payroll | $3,000,000 |
| Hours | 100,000 |
| AHE | $30.00 |
That is the official method: total pay divided by total hours.1
Example 2 — Hot wage print
Hawkish surpriseHypothetical AHE rises 0.6% in a month versus a 0.3% forecast.
| Actual | 0.6% |
| Forecast | 0.3% |
| Surprise | +0.3 pts |
Strong wage growth can raise rate-hike fears, and bond prices may fall. The figure covers the private sector for all employees, so it is a broad signal.2
Example 3 — Mix effect
Distorted averageHypothetically, many low-wage jobs are lost while high-wage jobs stay, so AHE jumps even though no one got a raise.
| Low-wage jobs | Fewer |
| Average | Higher |
| Real raises | None |
A tracker of individuals observed 12 months apart avoids much of this distortion, because it compares the same people.3
AHE vs Atlanta Fed wage tracker
| Aspect | Average hourly earnings | Atlanta Fed tracker |
|---|---|---|
| Source | Employer payroll survey | Current Population Survey |
| Measure | Average of payroll per hour | Median change for same people |
| Mix effects | Affected | Largely avoided |
| Timing | With jobs report | Later, monthly |
Who uses AHE
Rate traders
Wage data feed Federal Open Market Committee expectations.
Inflation watchers
Wages are an input to Consumer Price Index forecasts.
Macro analysts
AHE complements Nonfarm Payrolls.
FX traders
A surprise can move the dollar and other Economic Indicator trades.
Advantages and disadvantages
Advantages
- Timely: released with the jobs report.
- Large sample of employer payrolls.
- Two series show broad and worker-level views.
- Easy to compare over time.
Disadvantages
- Affected by changes in the job mix.
- Monthly figures are noisy and revised.
- Excludes most benefits.
- US-only; other countries publish different measures.
Going deeper
Read as far as you need. Each level builds on the one before it.
What AHE measures
Beginner
The headline figure is a plain average across jobs: total payroll over total hours.1
Two series
Intermediate
There are separate series for all private employees and for production and non-supervisory workers.2 The second has a longer history.
Alternative wage gauges
Advanced
The Atlanta Fed tracker follows the same individuals through the Current Population Survey, which helps separate real pay growth from changes in who is working.3
Common mistakes
Ignoring mix effects
Job losses in low-pay sectors can inflate the average.
Reading one month
Use the 3- or 12-month trend.
Forgetting revisions
Earlier months are often revised.
Treating AHE as total pay
It excludes most benefits.
Check your understanding
Test yourself before moving on. Each answer comes with an explanation.
Key points to remember
- AHE is payroll divided by hours.
- It is released with the US jobs report.
- Wage growth can feed inflation.
- Job mix can distort the average.
- Use the Atlanta Fed tracker as a cross-check.
Frequently asked questions
When is AHE released?
Is AHE adjusted for inflation?
What is a 'good' AHE number?
Further learning
- Nonfarm Payrolls
The jobs report headline.
- Inflation
Why wage growth matters.
- Consumer Price Index
The main price index.
- Federal Open Market Committee
Who reacts to wages.
Sources
This article is written in our own words. The sources below support the specific facts, rules and figures marked with a number in the text. Links open the original publisher’s page.
- U.S. Bureau of Labor Statistics. Handbook of Methods: Current Employment Statistics – Calculation (opens in a new tab) Checked .
- U.S. Bureau of Labor Statistics. Employment Situation Technical Note (opens in a new tab) Checked .
- Federal Reserve Bank of Atlanta. Wage Growth Tracker (opens in a new tab) Checked .
Educational content, not financial advice. Examples use hypothetical prices and simplified costs; actual fees, margin rules and regulations vary by broker, market and country. We are not affiliated with any publisher linked above. Last reviewed . Report an error or request a source credit.