US soft average hourly earnings

Elsewhere in the establishment survey, average hourly earnings were flat on the month and up 2.0% y/y. Average earnings for production and nonsupervisory employees were up 0.1% m/m and 1.9% y/y. Both numbers underperformed estimated forecast and are one reason to characterize the report as softer-than-expected.

 Average weekly hours were unchanged at 34.5, in line with the expectation, while the index of aggregate weekly hours for all private employees was up 0.2% m/m. The index of aggregate weekly hours rose at an annualized rate of 1.0% in Q2 versus 2.2% in Q1. The payroll proxy (aggregate weekly hours for all employees multiplied by average hourly earnings) slowed to a 3.2% annualized rate in Q2 versus 5.0% in Q1. The slowing in hours and earnings is likely one explanatory factor behind sluggish consumption spending earlier this year, says Barclays