This page 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. The orange diamonds are added to show when the Federal Reserve (Fed) started the interest rate hiking cycles in the past. The latest recession saw a very sharp rise, and then fall, in the unemployment rate. The Fed may also be more willing to wait for the unemployment rate to fall further towards 4%, or what's considered to be full employment in the U.S.