Employment
22cool
0.86 percentage points below its 10-year average | Data for Sep 2026
Hot and cold describe position, not good or bad: warm does not mean a fall is coming, and an extreme reading does not mean a quick reversal. We describe history only, with no buy or sell advice.
What it is
Average hourly earnings of US production and nonsupervisory employees, compared with the same month a year earlier.
Wages are the main cost behind service prices, so they affect whether inflation can come down.
Where it stands now
coldcoolneutralwarmhotHatched = earlier periods that were also cool
When it was here before
US stocks after it began, cumulative1 yr2 yr3 yr
For each period, the changes 1, 2 and 3 years after it began are cumulative and measured from its first month; “What happened next” is measured from every cool month, so the two give different numbers. The events named beside each period are major events of that time, not necessarily related to the readings here.
What happened next
Bars: median cumulative changeEarlier months with Wages cool, excluding the current period (94)All months (503)
Median of the deepest drop below the starting month within the next 5 years: −6.5% for months with Wages cool; −3.6% for all months.
The cool months come from a small number of market episodes (5), and neighboring months are not independent events; rises and falls are all listed. This is the historical record, not a forecast. “US stocks” means the S&P 500 price index compiled by Professor Shiller (monthly average, excluding dividends).
| Median position | Back to neutral (40–60) | Still no warmer than cool | |
|---|---|---|---|
| 1 yr later | 38cool | 40% | 52% |
| 3 yr later | 55neutral | 36% | 24% |
| 5 yr later | 55neutral | 40% | 27% |
Has hot or cold lined up with later returns?
1984–2021: average yearly change in US stocks over the next 5 years
There is no clear relationship between hot or cold and what came next. The gaps between the bars are not consistent across months (rank correlation below 0.25); this is a record of the past, not a forecast.
What it is linked to
WagestoCore inflationCommon explanation: Knock-on · same direction
Services rely mostly on labor, so wages push up service prices
This issue: Wages at 22 (cool), Core inflation at 35 (cool) — both below normal, in line with the common explanation.
Weak or inconsistentAgreement +0.46 · in step in 22 of 37 5-year periods
Values
Data and sources