$37.30
Avg Hourly Earnings (Private Sector)
2026 M02
Elevated
+3.9%
YoY Growth
$54.60
Information
+5.4%
Information Growth
11
Sectors Tracked
Average hourly earnings rose to $37.30 in February, representing a 3.9% year-over-year increase. This elevated growth rate signals persistent inflationary pressure, supporting the Federal Reserve's current restrictive monetary policy stance.
Average Hourly Earnings by Sector
| Sector | $/Hour | MoM | YoY | YoY % |
|---|---|---|---|---|
| Information | $54.60 | $+0.60 | $+2.80 | +5.4% |
| Financial Activities | $48.90 | $+0.20 | $+2.10 | +4.5% |
| Professional & Business | $45.20 | $+0.10 | $+1.60 | +3.7% |
| Construction | $40.70 | $+0.20 | $+1.60 | +4.1% |
| Mining & Logging | $40.50 | $-0.20 | $+0.40 | +1.0% |
| Total Private | $37.30 | $+0.10 | $+1.40 | +3.9% |
| Manufacturing | $36.40 | $+0.20 | $+1.50 | +4.3% |
| Education & Health | $36.20 | $+0.00 | $+0.90 | +2.5% |
| Other Services | $33.90 | $+0.10 | $+1.20 | +3.7% |
| Trade/Transport/Utilities | $31.80 | $+0.10 | $+1.30 | +4.3% |
| Retail Trade | $26.20 | $+0.10 | $+1.20 | +4.8% |
| Leisure & Hospitality | $23.40 | $+0.10 | $+0.80 | +3.5% |
Sector Analysis
The Information sector leads growth at 5.4%, reflecting a continued premium for specialized tech talent and digital transformation skills. Retail Trade's 4.8% jump suggests a tight low-wage labor market where firms must compete aggressively for frontline workers. Conversely, Education and Health Services lag at 2.5%, potentially indicating a shift toward automation or budget constraints in those specific service sectors.
Highest Paid Sectors
| Sector | $/Hour |
|---|---|
| Information | $54.60 |
| Financial Activities | $48.90 |
| Professional & Business | $45.20 |
Fastest Wage Growth (YoY)
| Sector | YoY % |
|---|---|
| Information | +5.4% |
| Retail Trade | +4.8% |
| Financial Activities | +4.5% |
Lowest Paid Sectors
| Sector | $/Hour |
|---|---|
| Trade/Transport/Utilities | $31.80 |
| Retail Trade | $26.20 |
| Leisure & Hospitality | $23.40 |
Slowest Wage Growth (YoY)
| Sector | YoY % |
|---|---|
| Leisure & Hospitality | +3.5% |
| Education & Health | +2.5% |
| Mining & Logging | +1.0% |
Average Hourly Earnings Trend (Total Private)
Wage Trends
At 3.9%, wage growth remains in an elevated regime, sitting significantly above the historical median of 2.9%. While these gains provide a buffer for consumer spending, they create a challenging 'sticky' inflation environment for the Fed. If these gains continue to outpace productivity, they risk sustaining a price-wage spiral that complicates the path to the long-term inflation target.
Historical Wage Growth Percentile
0.7%
3.9% (72th percentile)
7.9%
Historical median: 2.9%
Historical Parallels (Similar Wage Growth)
| Period | YoY % | XLY 6M | SPY 6M |
|---|---|---|---|
| M07 2025 | 4.0% | +14.1% | +12.4% |
| M01 2025 | 3.8% | -1.7% | +6.0% |
| M07 2024 | 3.8% | +16.6% | +4.2% |
| M01 2024 | 4.2% | +10.6% | +19.0% |
| M07 2023 | 4.3% | +0.6% | +6.5% |
| M06 2021 | 4.1% | +16.2% | +10.6% |
| M06 2019 | 3.7% | +4.5% | +10.6% |
| M12 2018 | 3.8% | +19.4% | +14.6% |
Forward Returns Summary (10 periods)
Consumer Discretionary (XLY)
| 3M Median | +4.5% | Positive | 70% |
| 6M Median | +13.1% | Positive | 80% |
| 12M Median | +9.8% | Positive | 78% |
S&P 500 (SPY)
| 3M Median | +4.6% | Positive | 70% |
| 6M Median | +10.6% | Positive | 90% |
| 12M Median | +18.1% | Positive | 78% |
Historical Context
Current growth levels place the labor market in the 72nd percentile of historical data, mirroring periods like early 2025 and late 2018. Historically, these levels have been bullish for equities, with the S&P 500 posting a median 12-month return of 18.1% following similar prints. Investors should note that while the Fed may stay hawkish, the underlying economic strength often supports long-term market gains.
Average Weekly Hours
| Sector | Hours/Week | YoY Change |
|---|---|---|
| Total Private | 34.3 | +0.1 |
| Manufacturing | 40.1 | +0.0 |
| Goods-Producing | 40.1 | +0.4 |
| Private Services | 33.2 | +0.1 |
Hours Analysis
Average weekly hours ticked up slightly to 34.3, suggesting that labor demand remains resilient despite higher borrowing costs. The stability in manufacturing hours at 40.1 indicates that industrial production is holding steady rather than signaling a broader economic contraction.
Staffing
| Stock | Price | Open Gap | 1M | 6M | 1Y | YTD | VS S&P 500 |
|---|---|---|---|---|---|---|---|
| ASGN ASGN Inc | $43.13 | -0.72% | -15.0% | -19.6% | -34.7% | -10.5% | -13.8% |
| RHI Robert Half | $24.91 | -3.21% | -20.4% | -32.9% | -53.4% | -8.3% | -19.2% |
| KFRC Kforce | $27.83 | -3.59% | -21.1% | -8.8% | -41.7% | -10.0% | -19.9% |
| MAN ManpowerGroup | $28.70 | -3.69% | -17.6% | -29.7% | -49.1% | -3.5% | -16.3% |
HR Tech
| Stock | Price | Open Gap | 1M | 6M | 1Y | YTD | VS S&P 500 |
|---|---|---|---|---|---|---|---|
| PAYC Paycom | $136.66 | +0.64% | +9.9% | -38.3% | -36.8% | -14.2% | +11.2% |
| PAYX Paychex | $98.38 | -0.82% | +1.3% | -26.8% | -33.7% | -12.3% | +2.5% |
| ADP ADP | $222.70 | -0.83% | -5.3% | -25.1% | -27.8% | -13.4% | -4.0% |
| WD Workday | $50.51 | -2.38% | -16.8% | -38.4% | -37.6% | -16.0% | -15.6% |
Retail
| Stock | Price | Open Gap | 1M | 6M | 1Y | YTD | VS S&P 500 |
|---|---|---|---|---|---|---|---|
| WMT Walmart | $123.31 | -0.66% | -3.4% | +24.0% | +30.8% | +10.7% | -2.2% |
| TGT Target | $120.36 | -0.99% | +8.1% | +30.3% | +5.1% | +23.1% | +9.4% |
| COST Costco | $982.57 | -1.58% | +0.5% | +3.6% | -4.8% | +13.9% | +1.7% |
Benchmark
| Stock | Price | Open Gap | 1M | 6M | 1Y | YTD | VS S&P 500 |
|---|---|---|---|---|---|---|---|
| XLY Consumer Discretionary ETF | $116.55 | -1.51% | -3.7% | +1.3% | +12.9% | -2.4% | -2.4% |
Market Context
| Index | Open Gap | 1W | 1M |
|---|---|---|---|
| S&P 500 | -0.90% | -1.13% | -1.26% |
| Dow Jones Industrial | -0.67% | -3.12% | -2.61% |
| Nasdaq Composite | -1.44% | -0.57% | -2.18% |
| VIX | 21.8 | +0.0 |
| 10Y Treasury | 4.21% | +0 bps |
Sector Performance
| Sector | Open Gap | 1M | YTD |
|---|---|---|---|
| XLP | +1.09% | -0.54% | +9.95% |
| XLE | +0.09% | +9.31% | +26.33% |
| XLF | +0.02% | -4.30% | -6.46% |
| XLU | -0.58% | +8.46% | +9.86% |
| XLV | -0.73% | -0.12% | -0.57% |
| XLRE | -0.90% | +6.20% | +7.41% |
| XLB | -1.02% | +0.26% | +12.08% |
| XLC | -1.03% | +0.59% | +0.61% |
Positioning
Retailers face continued margin compression as wage growth in that sector outpaces the national average. Conversely, HR technology and staffing firms stand to benefit as companies seek efficiency tools to manage rising labor costs and complex hiring environments.
Bottom Line
The February data confirms a robust labor market that keeps the Fed on a higher-for-longer trajectory. Investors should favor sectors with pricing power to offset wage costs, while remaining optimistic about 12-month equity performance based on historical precedents.