US DATA: Softer Than Expected Wages And Hours Side Of Establishment Survey

The earnings side of the establishment survey surprised weaker in June, from both wages and average hours worked, chiming with some softer private sector payrolls 

• Average hourly earnings growth was softer than expected in June at 0.22% M/M (cons 0.3) although there had been a mild dovish skew to analyst forecasts.
• Downward revisions added to this softer take from the earnings side of the establishment survey – see details below.
• The non-supervisory category (omitting about 20% of the highest paid roles) was stronger on the month at 0.29% M/M but also drove those downward revisions.
• It left Y/Y AHE growth at 3.71% after 3.81% for its lowest since Jul 2024 and before that May 2021 or non-supervisory AHE growth at 3.89% after 3.94% for its softest since May 2021.
• Note that this surprise modest weakness is more notable considering it also comes with surprisingly soft average hours worked (which would mechanically bias AHE of salaried employees higher), falling back to 34.2 (cons 34.3) after three months at 34.3. We’ll touch more on this shortly.