Private Sector Triumvirate: Payrolls, Hours Worked, and Earnings Increase
The U.S. non-farm job reports over the past two months showed solid gains in payrolls, working hours and earnings. The aggregate weekly earnings in the U.S. non-farm private sector, which are the product of average hourly earnings, average weekly hours, and total non-farm private payrolls, increased at an annualized rate of 4.0% in 4Q2012. Since bottoming in October 2009, the aggregate earnings have increased 13.3%, of which the increase in average weekly hours contributed 2.4%, the increase in average wages contributed 6.1%, and payroll gains contributed the remaining 4.8%. The solid gains in aggregate earnings should provide substantial support for U.S. household disposable income.
Normalized Aggregate Weekly Earnings – Non-Farm Private Sector