US average hourly earnings expected to rebound sharply; private workweek to expand

The calendar effects associated with the comparatively late termination of this month's canvassing period - it ended on October 17 - suggest that average hourly earnings probably climbed by 0.4% to $25.18, erasing a one-cent dip in the prior month. The above-consensus forecast, should it prove accurate, would push the year-to-year growth of the closely followed nominal compensation measure two ticks higher to 2.4%, breaching the upper end of the 1.5-2.3% range that has prevailed over the past six years. 

"We expect ever-tightening labor market conditions to boost the annual growth of private hourly earnings to 2.9% by the end of 2016", says Societe Generale.

The timing of the establishment survey probably extended the mean work span of all private employees by six minutes to 34.6 hours in October. While changes in the average workweek usually receive little attention from market participants, the lengthening projected above would be the functional equivalent of adding almost 350,000 workers from a labor-input perspective. Together with an anticipated 205,000 rise in private payrolls, the workweek forecast would place total hours 0.5% above their September level and a healthy 1.5% annualized above their summer-quarter average.