AHE is an average, which makes it vulnerable to composition effects: if low-wage jobs disappear in a downturn, the average rises even though nobody got a raise. The employment-cost-index is the cleaner but far less timely alternative.
Markets nonetheless trade it hard, because wages are the main cost in services and services excluding housing is the stickiest part of core-pce. Wage growth consistent with 2% inflation is roughly 2% plus productivity growth.
Example: AHE rises 0.4% on the month and 4.1% year over year. With trend productivity near 1.5%, that implies unit labour cost growth around 2.6%, above the rate consistent with a 2% target.
Related: establishment-survey, employment-cost-index, unit-labour-costs, core-pce, productivity