Average Hourly Earnings Growth vs PCE Price Index (Year-over-Year)
Average Hourly Earnings Growth is currently 3.8% (down -0.2%). PCE Price Index (Year-over-Year) is currently 2.5% (down -0.1%).
| Metric | Average Hourly Earnings Growth | PCE Price Index (Year-over-Year) |
|---|---|---|
| Current value | 3.8% | 2.5% |
| Previous reading | 4% | 2.6% |
| Change | -0.2% | -0.1% |
| Trend | down | down |
| Frequency | Monthly | Monthly |
| Source | Bureau of Labor Statistics | Bureau of Economic Analysis |
| Last updated | 2026-04-04 | 2026-03-28 |
| Category | employment | inflation |
What Average Hourly Earnings Growth measures
Average hourly earnings measures the year-over-year percentage change in wages for all private-sector employees. It is a key indicator of labor cost pressures and consumer spending power.
Wage growth at 3.8% year-over-year outpaces current inflation, meaning workers are gaining real purchasing power. For executives, this signals continued pressure on labor budgets — compensation packages must grow to retain talent. However, wage growth moderating from 4%+ suggests the worst of the post-pandemic wage spiral may be easing.
What PCE Price Index (Year-over-Year) measures
The Personal Consumption Expenditures (PCE) price index is the Federal Reserve's preferred inflation measure. It tracks prices of goods and services consumed by households and adjusts its basket dynamically as consumers shift spending patterns.
PCE at 2.5% is closer to the Fed's 2% target than CPI, giving the Fed more room to consider rate cuts. The PCE tends to run 0.3-0.5 points below CPI because it accounts for consumer substitution (switching to cheaper alternatives when prices rise). For executives, the PCE trajectory suggests inflation is on a downward path, which should eventually lead to lower borrowing costs.
Frequently asked
Average Hourly Earnings Growth is currently 3.8%, down -0.2% from the previous reading. Source: Bureau of Labor Statistics, updated monthly.
PCE Price Index (Year-over-Year) is currently 2.5%, down -0.1% from the previous reading. Source: Bureau of Economic Analysis, updated monthly.
Wage growth at 3.8% year-over-year outpaces current inflation, meaning workers are gaining real purchasing power. For executives, this signals continued pressure on labor budgets — compensation packag PCE at 2.5% is closer to the Fed's 2% target than CPI, giving the Fed more room to consider rate cuts. The PCE tends to run 0.3-0.5 points below CPI because it accounts for consumer substitution (swit