Average Hourly Earnings Growth vs Yield Curve Spread (10Y - 2Y)

How These Two Indicators Relate

Wage Growth sits in the employment category and Yield Curve sits in the rates category, so they describe different parts of the same economy. Watching them together provides cross-checks: a coordinated move in both directions confirms a regime shift, while a divergence often reveals which sector of the economy is leading or lagging.

Both readings are currently moving lower. Wage Growth has moved lower -0.2% since the prior release; Yield Curve has moved lower -0.0pp. When two related indicators decline together, the move usually reflects a real economic shift rather than measurement noise.

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.

Methodology: The BLS calculates average hourly earnings from its establishment survey, dividing total private payroll by total hours paid. The year-over-year change eliminates seasonal effects. It includes base pay but excludes benefits, bonuses, and employer-paid insurance. Source: U.S. Bureau of Labor Statistics (series CES0500000003).

What Yield Curve Spread (10Y - 2Y) Measures

The yield curve spread measures the difference between the 10-year and 2-year Treasury yields. When positive (normal), longer-term bonds pay more. When negative (inverted), it historically signals recession risk.

The yield curve has un-inverted to +0.41 percentage points after being inverted for much of 2023-2024. Historically, the yield curve un-inverting and steepening often occurs just before a recession starts — the recession signal is not the inversion itself, but the re-steepening. For executives, this is a watch-closely moment: the economy may be entering a transition period.

Methodology: Simply calculated as: 10-Year Treasury Yield minus 2-Year Treasury Yield. A positive spread is 'normal' (investors demand more for lending longer). An inverted curve (negative spread) has preceded every U.S. recession since 1955, with only one false signal. Source: FRED at the St. Louis Fed (series T10Y2Y).

How These Comparisons Are Built

Each pairwise comparison page is statically generated from the live indicator dataset — values, trends, and source links are pre-rendered into HTML at build time. When the underlying dataset refreshes (each indicator on its own publication schedule), the comparison page regenerates automatically. ExecBolt does not estimate, model, or interpolate any reading; every value comes from the publishing agency’s primary release. For the full sourcing approach, citation format, and known limitations, see the methodology page.

For plain-language guides to the concepts behind Wage Growth and Yield Curve, see the learn library. For tools that translate macro readings into business outputs (DCF, runway, break-even), see the calculators page. Authoritative external context comes from the Federal Reserve’s FRED database, the U.S. Bureau of Labor Statistics, the U.S. Bureau of Economic Analysis, and the SEC EDGAR system.

Frequently Asked Questions