US Data Strong But Should Wages Be a Concern?

The first batch of releases in our US economic data marathon today painted a fairly optimistic picture for the US, with CPI inflation rising 2.5% from January last year, core inflation rising 2.3% over the same period and retail sales up 0.4% from what was already and strong December, made even better by the upward revision to 1%. Under the circumstances, it’s no surprise that the US dollar has rallied on the back of these numbers as all exceeded expectations and should feed into the narrative that the economy is improving and the Fed should continue raising rates.

However, the lesser followed release, real average weekly earnings, was not so impressive falling 0.4% and continuing a potentially worrying trend that has materialised over the last year.

The full US real earnings report from the BLS can be found here.

US Weekly Earnings

Reuters Eikon Terminal

We’ve all been relieved that average hourly earnings have, broadly speaking, been improving, but with inflation now ticking higher and the average workweek having fallen over the last year, consumers may not be as well off as we hoped.

Economic Calendar

For a look at all of today’s economic events, check out our economic calendar.


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam
Craig Erlam

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