Major Banks Diverge on U.S. Average Hourly Earnings Forecast for January
Ahead of the U.S. January labour report, major financial institutions have released divergent predictions for average hourly earnings, highlighting ongoing uncertainty in wage growth and inflation dynamics.
Economists widely expect year-over-year (YoY) earnings growth to be around 3.6%, slightly above the Federal Reserve’s preferred trend and consistent with consensus estimates. Many forecasters — including Scotiabank, Barclays, Capital Economics, and Dekabank — align around this 3.5–3.6% range, while banks such as JPMorgan Chase, Pantheon Macroeconomics, BNP Paribas, HSBC, Jefferies, TD Securities and UBS also project a modestly higher 3.7% YoY rise. This reflects expectations that wage pressures remain above historical norms, even as labour market momentum cools.
For the month-over-month (MoM) change, Reuters consensus and several institutions forecast a 0.3% increase, with Morgan Stanley and Scotiabank at 0.2% and Goldman Sachs slightly higher at 0.4% — underscoring differing views on short-term wage momentum.
Market Implication: Mixed wage forecasts could produce volatility in FX, equities and bond yields when the official jobs report releases, as traders gauge inflation pressures and Fed rate expectations ahead of data.