Psst. Going to let you in on a secret. There’s a trick to watching today’s Jobs Report like a Wall Street pro.
Don’t pay too much attention to how many jobs are created, and what the unemployment rate is. That’s what the media cares about.
What you want to watch is wages. Sharply rising wages indicate a tightening labour market, and will get the market spooked that the Fed will raise rates soon. Subdued wages indicate there’s no pressure on Yellen to hike ever.
So if you want to watch the Jobs Report like a Wall Street insider, pay attention to this number.
Here’s the chart of year over year average hourly earnings growth. As you can see, it’s obviously picked up quite a bit over the last several months, but it’s still nowhere near pre-crisis levels, and the pickup hasn’t been totally consistent.