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U.S. wage growth has slowed sharply over the past year and is on pace to return to pre-pandemic levels in the second half of 2023, according to new data from career site Indeed.
The Salary Tracker – based on salaries for job postings on Indeed – showed that wages rose 6.5% in November compared to a year earlier. That’s about 9% in March, according to the index, suggesting employers are facing less competition for new hires.
The slowdown was broad-based, with nearly 82 percent of workplaces seeing wage growth decline in November from six months ago.
Based on the current trajectory, wage growth will return to pre-pandemic levels of 3% to 4% by the second half of the year.
FED’S WAR ON INFLATION COULD 1 NATIONAL JOBS
A hiring sign is posted at a Target store in San Rafael, California on August 5, 2022. (Justin Sullivan/Getty Images/Getty Images)
In fact, it suggested that the data is a leading indicator because it is based on wages advertised in job advertisements rather than the actual wages paid to workers.
“Wages and salaries posted in job postings on Indeed are a potential canary in the coal mine labor market,” writes Indeed Labor Economist Nick Bunker. may report that it can show measures.”
Indeed, the gauge contrasts with a separate Labor Department report released last week that found average hourly wages increased by 0.6% more than double what analysts had expected in November. According to the report, wages increased by 5.1 percent year-on-year.
Shoppers walk through a supermarket on August 23, 2022 in Montebello, California. (Frederick J. Brown/AFP via Getty Images/Getty Images)
The Federal Reserve It has been watching wage growth closely as it tries to fight inflation with its most aggressive rate hike campaign since the 1980s. Policymakers have expressed concern about the possibility of a wage-price spiral, a scenario in which rising wages keep inflation high, prompting businesses to raise prices further to cover labor costs.
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“I think wages will affect inflation, and inflation will affect wages,” Fed Chairman Jerome Powell said after the board’s November meeting.
He continued: “I don’t think wages are the main story of why prices are going up. … I don’t think we’re seeing a wage-price spiral. But once you see it, you’re in trouble. , we we don’t want to see that. We want wages to rise. We just want them to rise steadily and in line with 2% inflation.”