Wage growth may have finally stabilized, according to an analysis released July 11 by Indeed Hiring Lab, registering at 3.1% the past three months, in line with the pre-pandemic average.
This signals the economy may be settling into a groove, Indeed economists wrote.
The year-over-year three-month average wage increase hit as high as 9.3% in 2022, according to Indeed’s wage tracker. But growth has stalled across all wage levels to about the same percentage, data showed.
“For central bankers and anyone else concerned about inflation, moderate and low wage growth is a sign the labor market isn’t pushing up inflation. But keep in mind that wage growth is often a lagging indicator of labor market strength, as employers adjust their wages after noticing changes in the difficulty of hiring or retaining workers,” the post said.
Other statistics point to an economy that may be entering a serious cooling off period. The unemployment rate has increased for the past three months, despite it being now at a “historically good place,” Indeed said. Job gains in previous months had always been revised downward, indicating slower growth than originally perceived, and job loss could be on the rise due to an increased rate in employed workers moving to unemployment.
The good news for employers is that a softer job market may make retention easier in the coming year; employers are already saying that issues with recruitment and retention have decreased significantly in 2024, according to data from The Conference Board.
