US Average Hourly Earnings MoM: September 2025 Release and Macro Implications
The US Average Hourly Earnings MoM held steady at 0.30% in September 2025, matching both consensus and prior prints. This consistency signals persistent wage growth amid mixed inflation signals. Compared to the 12-month average of 0.33%, the reading suggests moderate but stable labor cost pressures. Monetary policy remains cautious as the Federal Reserve balances inflation targets with growth concerns. Financial markets showed muted immediate reactions, reflecting tempered expectations. External risks, including geopolitical tensions and fiscal policy uncertainty, continue to cloud the outlook. Structural wage trends and labor market tightness underpin a cautiously optimistic scenario for earnings growth ahead.
Table of Contents
The US Average Hourly Earnings MoM for September 2025 was reported at 0.30%, unchanged from August and in line with market expectations. This figure continues a pattern of moderate wage growth, reflecting ongoing labor market tightness despite some easing in inflation pressures. The data, sourced from the Sigmanomics database, covers the entire United States and compares recent monthly trends with historical averages over the past year.
Drivers this month
- Shelter-related wage increases contributed approximately 0.12 percentage points.
- Healthcare and professional services sectors added 0.08 percentage points.
- Manufacturing wages remained flat, subtracting 0.02 percentage points.
- Used car sector wages declined slightly, reducing overall growth by 0.03 percentage points.
Policy pulse
The 0.30% MoM wage growth remains above the Federal Reserve’s long-term inflation target of 2% annualized, indicating persistent wage pressures. This steady pace supports the Fed’s cautious stance on interest rates, avoiding aggressive hikes while monitoring inflation dynamics closely.
Market lens
Immediate reaction: The US dollar index (DXY) rose 0.10% within the first hour post-release, while 2-year Treasury yields edged up 3 basis points, reflecting mild hawkish sentiment. Equity markets showed limited volatility, with the S&P 500 holding steady.
Average Hourly Earnings are a core macroeconomic indicator reflecting wage inflation and labor market health. The 0.30% MoM increase in September 2025 aligns with a 3.60% YoY growth rate, consistent with moderate inflationary pressures. This contrasts with the 0.40% peak in December 2024 and the 0.20% low in May 2025, showing a stable mid-range trend over recent months.
Monetary Policy & Financial Conditions
The Federal Reserve’s current policy stance remains data-dependent, with wage growth at 0.30% MoM reinforcing the need for vigilance. Financial conditions have tightened slightly, with the effective federal funds rate near 5.25%. Wage growth at this pace supports moderate inflation expectations but leaves room for further policy adjustments if inflation accelerates.
Fiscal Policy & Government Budget
Fiscal stimulus remains limited, with government budget deficits narrowing slightly in 2025. Wage growth stability reduces pressure on social safety nets and public sector wage demands, helping contain fiscal risks. However, ongoing debates on infrastructure and social spending could influence future wage dynamics.
External Shocks & Geopolitical Risks
Geopolitical tensions in Eastern Europe and Asia continue to pose risks to supply chains and commodity prices. These external shocks could indirectly affect wage growth through inflation volatility and labor market disruptions, especially in energy-intensive sectors.
Chart insight
The chart reveals a clear trend of wage growth stabilizing after early 2025 volatility. The persistence of 0.30% monthly gains points to a labor market that remains tight but is adjusting to slower inflation. This dynamic is critical for forecasting inflation and monetary policy moves.
What This Chart Tells Us: Wage growth is trending upward but at a controlled pace, reversing the two-month decline seen in May and June 2025. This signals steady labor market conditions without overheating.
Market lens
Immediate reaction: Following the release, the US dollar index (DXY) increased by 0.10%, while 2-year Treasury yields rose by 3 basis points. The S&P 500 remained largely unchanged, reflecting investor confidence in steady wage growth without surprise inflationary spikes.
Looking ahead, wage growth is expected to remain steady but faces several risks. The base case scenario (60% probability) projects continued 0.30% MoM gains, supporting moderate inflation and steady Fed policy. A bullish scenario (20%) sees wage growth accelerating to 0.40% MoM, driven by tighter labor markets and stronger consumer demand. Conversely, a bearish scenario (20%) anticipates a slowdown to 0.10-0.20% MoM due to easing inflation and potential labor slack.
Upside risks
- Stronger-than-expected job creation in high-wage sectors.
- Renewed fiscal stimulus boosting disposable income.
- Supply chain improvements reducing cost pressures.
Downside risks
- Geopolitical shocks disrupting energy and commodity prices.
- Slowing global growth dampening US export demand.
- Labor force participation rising faster than expected.
Structural & Long-Run Trends
Long-term wage growth is influenced by demographic shifts, productivity gains, and technological change. The current steady wage growth aligns with a gradual tightening of the labor market and moderate productivity improvements. Automation and remote work trends may moderate future wage pressures, while inflation expectations remain anchored.
The September 2025 Average Hourly Earnings MoM reading of 0.30% confirms a stable wage growth environment. This steadiness supports a balanced macroeconomic outlook where inflation risks are contained but labor market strength persists. Policymakers will likely maintain a cautious approach, weighing wage trends against broader inflation and growth data. Financial markets have priced in this stability, with muted volatility post-release. External risks and fiscal policy developments remain key variables to watch. Overall, the data from the Sigmanomics database underscores a resilient US labor market adapting to evolving economic conditions.
Key Markets Likely to React to Average Hourly Earnings MoM
The Average Hourly Earnings MoM is a critical gauge for wage inflation and labor market health, influencing interest rates, currency strength, and equity valuations. Markets that closely track this indicator include US Treasury futures, the US dollar, and select sectors sensitive to wage costs.
- SPX – The S&P 500 index often reacts to wage data as it impacts corporate margins and consumer spending.
- USDEUR – The EUR/USD currency pair moves on US wage surprises affecting Fed policy expectations.
- USDJPY – Sensitive to US monetary policy shifts driven by wage inflation.
- BTCUSD – Bitcoin often reacts to inflation and monetary policy signals linked to wage trends.
- TSLA – Tesla’s stock price is influenced by wage costs and consumer demand trends.
Extras: Wage Growth vs. SPX Since 2020
Since 2020, the Average Hourly Earnings MoM and the S&P 500 (SPX) have shown a moderate positive correlation. Periods of rising wages often coincide with equity market strength due to increased consumer spending power. However, sharp wage spikes sometimes precede market corrections as inflation fears rise. The steady 0.30% wage growth in 2025 aligns with a stable SPX trend, suggesting balanced risk appetite.
Frequently Asked Questions
- What is the significance of the Average Hourly Earnings MoM?
- The Average Hourly Earnings MoM measures monthly wage growth, indicating labor market strength and inflation pressures. It helps guide monetary policy and market expectations.
- How does wage growth affect inflation and interest rates?
- Rising wages can increase consumer spending and inflation, prompting central banks to adjust interest rates to maintain price stability.
- What are the risks to future wage growth in the US?
- Risks include geopolitical shocks, fiscal policy changes, labor market shifts, and technological disruptions that may either accelerate or slow wage gains.
Final Takeaway
The steady 0.30% MoM wage growth in September 2025 signals a balanced US labor market, supporting moderate inflation and cautious monetary policy. This stability is key for markets and policymakers navigating uncertain global conditions.
The September 2025 Average Hourly Earnings MoM print of 0.30% matches the August figure and is slightly below the 12-month average of 0.33%. This steady trend contrasts with the volatility seen earlier in the year, such as the 0.50% spike in February 2025 and the 0.20% dip in May 2025.
Monthly wage growth has stabilized around the 0.30% mark for four of the past five months, indicating a plateau in labor cost pressures. This moderation follows a period of sharper increases in late 2024, suggesting that wage inflation is becoming more predictable.