By Arlenys Tabare
Mar 18, 2024, 11:59 AM EDT
According to recent data published by employment website Indeed, US wage growth is slowing and they anticipate that it could reach pre-pandemic levels, all this amid persistent inflation and high interest rates.
In this regard, Indeed labor economist Nick Bunker noted that “recorded wage growth has fallen almost 3 percentage points over the past year. The pace of deceleration is surprising”, said.
According to the report, salaries increased by 3.3% for the second month of this year compared to the same period in 2023, which marks a big difference compared to the 9.3% in 2022. Indeed detailed in the analysis that the most pronounced drop has been in the low-wage sectors when in February they fell 3.4% compared to 12.5% in 2022.
“It is uncertain how long this will last,” Bunker noted, while mentioning that “given the enormous increase in posted salaries in those sectors, Wage growth is still above its pre-pandemic pace“, he indicated.
Although the labor market remains persistent despite the high inflation now stagnant above 3% and the pressure of rising interest rates that currently stand at 5.50%, even the sectors with high salaries perceived a drop of 2.6% since its maximum of 8.2%.
This month the Department of Labor report showed that the unemployment rate increased by 3.9%, employers added about 275,000 jobs in FebruaryAlthough the labor sector remains strong, specialists do not rule out that it could weaken. Taking into account that hundreds of companies have also announced large waves of layoffs, pressured by the need to reduce costs.
Finally, the Federal Reserve is waiting for more stable economic reports to make a decision on interest rate cuts, which are anticipated later this year.
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