Real average weekly earnings is the market indicator used in fundamental analysis. It is expressed in absolute terms and represents an index in relation to the previous period. The index slightly influences movement of prices, therefore, it is considered supplementary and can act as supportive to such indicators of fundamental analysis as major interest rates or non-farm.
Real average weekly earnings accounts for inflation and is calculated in relation to 1982, which was conditionally taken for benchmark. Thus, this fundamental indicator can be considered as the inflation figure, which is caused by increase in earnings. Also it can perform as the indicator of rate consolidation: if increment of major interest rates of Central Bank is expected, then increase of earnings can tell about growth of national currency rate.
Publication of data is made simultaneously with publication of Consumer Price Index at 8:30 a.m of New York time, regularly in the middle of every month.
Average hourly earnings
Average hourly earnings – this index shows current conditions of labor market and is quite reliable. In contrast to Average weekly earnings, this indicator is more influential for the market, though is also is associated with inflation processes. It is considered that increase of average hourly earnings leads to inflation too and in the result interest rates grow. Therefore, while making decisions about interest rates, Federal Reserve system accounts for Average hourly earnings as inflation figure. The reason is that in contrast to a similar figure Employment Cost Index, it is published on a monthly basis and performs as an early indicator of the situation on labor market.
Variability of index can be called its disadvantage. It includes temporary changes of earnings level as well as payment for extra hours, which does not impact on cost of labor in general.
However, unlike weekly Average earnings figure it is published every month rather than every three months and allows monitoring changes on labor market earlier than another associated index allows doing that.
In terms of Forex market analysis, Average hourly earnings index shall be considered as the indicator tied to consolidation of national currency. Despite depreciation of national currency caused by index growth (because of inflation) and decline of competitive ability of production, Federal Reserve System usually decides about raising interest rates to keep up with the index growth. All that leads to consolidation of national currency and growth of rate.
Average workweek – is a fundamental indicator used in Forex market analysis. It renders average workweek duration and is published once per month on the first work Friday of month at 8:30 a.m of New York time along with Non-Farm payrolls. Despite Average workweek index inessentially influences the market, it is used in market analysis as early figure for other indicators: Industrial Production and Personal Income, which, in their turn, much more impact on the economy.
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