On the left, this chart is a summary of the U.S. labor market. The grey line shows its unemployment rate and the purple line is the year-over-year change in hourly earnings. Historically, there is a clear relationship between the two indicators. As the unemployment rate fell and the labor markets tightened, average hourly earnings rose at a faster rate as employers need to pay more to attract workers.

On the right, the chart compares the JOLTS job openings (a proxy for labor demand) to the number of people unemployed (a proxy for labor supply). The chart reflects the tightness of the U.S. labor market as labor demand outpaces supply, and this tightness is usually correlated with a decreasing unemployment rate and rising wages.