The most important number in the jobs report won't be about job creation

Joe LaVorgnaCNBCJoe LaVorgna

Last month, December’s jobs report revealed that average hourly earnings actually declined month-over-month by 0.2%.

This was the first decline since July 2013. It was all the the biggest drop in recorded history, which only goes back to 2006.

Indeed, a reasonable amount of wage growth has been one of the few things missing in the US economic recovery.

Many economists point to a number of structural factors to explain anemic aggregate wage growth. Among other things, they include ageing demographics and the stalling skills of those returning to the workforce.

Regardless of the explanation, December’s weak average hourly earnings number was stunning.

For some economists, this average hourly earnings figure may be even more important than the number of jobs created during the month.

Most importantly, we are interested to see if the unexpected drop in December average hourly earnings (-0.2%) is revised away, which is possible,” Deutsche Bank’s Joe LaVorgna wrote. “Thus far, wage pressures have been largely muted. However, we doubt wage inflation will remain contained much longer if the labour market continues to generate 200k-plus monthly payroll gains alongside weak productivity readings.”

Economists surveyed by Bloomberg are looking for 0.3% month-over-month growth in January. LaVorgna expects 0.2%.

We shall see.

Average hourly earningsFREDBiggest drop in recorded history.

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