Average Hourly earnings reported by the Bureau of Labor Statistics was negative 0.1 in September which represented the 8th time in the last 10 years and 6 times in the last 5 years when minus hourly earnings recorded a deficit. The worst reading in the last 10 years was minus 0.06 last January, 10 months ago. Exclude minus 0.06 as a possible outlier then the next worst report was negative 0.03 and 0.04 and printed 3 and 4 years ago or exactly 38 and 50 months. Negative was recorded twice in the past year. Prior to the past year, the next negative report was 3 years ago or exactly 36 months when minus 0.01 was seen to match last month’s minus 0.01 reading.
Exactly 6 times in the past 10 years 0.00 was printed, seen 5 times in the last 5 years and 3 times in the past 2. Exclude 14 months of negative and zero earnings, 100 months was positive in the past 114 or 9.5 years. Further positive readings recorded 9 in the past 12 months, 19 in the past 24 and 48 in 60 months. The BLS reports Average Hourly Earnings at $25.09, off 1 Cent in September after a 9 Cent rise in August.
From minus 0.01, the 7 year average is the next number to beat at 0.039 then the 5 year at 0.040. Tough resistance occurs at the 1 and 10 year averages at 0.045 and 0.044. The strongest resistance is seen at 0.04 Medians and a commonality across all averages. Point 0.04 is a long way from minus 0.01 and its why all averages are way oversold.
The targets on all averages from 1 to 9.5 years are found at minus 0.005, 0.001, 0.004, 0.003, 0.002, 0.005 and 0.008. The range in all averages are found at 0.2. Why the low targets into barely positive territory is because Average Hourly Earnings are fighting oversold on one side Vs severe and significant Peaks on the other side. And its found in all averages from 1- 9.5 year. The drivers for Hourly Earnings are the 3 and 7 year averages where most significant Peaks are seen. Part of the explanation is found in Average Weekly Hours.
Since April 2006, 9.5 years or 114 months, Average Weekly Hours reported 0.00 in 54 months or just under 1/2. In 26 months, minus 0.1 was printed, 2 times in the last 12 months, 13 times in the last 5 years and 14 times between the 5 and 10 year averages. Positive months were printed twice in the past year at 0.1, 5 times in the past 2 years and 17 times in the past 60 months, 5 years. Exactly 31 positive months were reported at 0.1 in the last 114 months or 9.5 years. Unemployed persons remains at 7.9 million.
The BLS reports the average weekly hours at 34.5 and matches September 2014 but below 34.6 for July and August 2015. The worst category is Leisure and Hospitality at 26.3 hours followed by Retail at 31.6. The best is Mining and Logging at 44.0 followed by Utilities at 42.3.
From Minus 0.1 in September, the current reading is below every average from 1 – 9.5 years. Oversold is seen in all averages particularly between the 1 – 5 year points. Peaks are seen in all averages but highly significant at the 2, 4, 7 and 10 year. Targets to align the distribution all remain negative except the 1 year at 0.0026 but an explanation is its near bottom of oversold. Further targets include -0.0634, -0.0699, -0.0671, -0.0681, -0.1322 and -0.1234. The numbers to beat above are found at the 2, 3, 4 and 5 year averages at 0.0020, 0.0027, 0.004 and 0.005. To see a sustainable upward trajectory, weekly hours must pass above the 1 and 7 year averages at 0.0131 and 0.0603.
Average Weekly Manufacturing hours was negative 40 of 114 months and positive 74. Zero was recorded in 27 months and 5 times in 12 months, 10 times in the past 26 months, 17 times in 60 months. The 1 year range is -0.2 to + 0.2 and 2 year between -0.3 to + 0.3 yet only 8 times in 5 years has + and Minus 3 revealed. The BLS reported in September the Manufacturing workweek declined 0.2 hours to 40.6.
From September -0.2 and bottom of the range, current point is below every average from 1 – 9.5 ears and oversold but most oversold between the 1 – 5 year. Peaks are seen from averages between 2- 9.5 but most specifically at the 10, 7, 3, 2 and 5. Targets remain negative throughout all averages beginning at -0.1483, -0.1548, -0.1411, -0.1616, -0.1526, -0.1741 and -0.1670. To see any sustainable upward trajectory, averages must break above the 7 and 10 year at 0.0119 and 0.0070. Short term points must first break from the 1- 3 year averages at -0.025, -0.0125 and -0.0027.
Downward pressure seen in Hourly Earnings is the result of both Averages in Total average workweeks and Manufacturing. All averages in all categories are fighting severe oversold Vs highly significant Peaks. Its obvious all categories must rise but how far is questionable due to significant Peaks. An explanation is job gains or subtractions month to month are contained within a range of about 50,000 from the forecast. Recovery was seen since crisis lows but job recoveries haven’t been seen in all job categories across the board. Without further inspection of the data, what can be stated as fact is more of the same is expected as we rise and fall on a slow slow trend.
Brian Twomey, Inside the Currency Market, btwomey.com