Wage growth may be slowing from ‘breakneck’ pace
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On December 3, 2021, a sign advertising Now Hiring is displayed in front of a Winn-Dixie supermarket in Miami.
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Rapid pay growth is a sign of the rapidity with which they are being paid. characterized the labor marketIt is possible that the pace of change has slowed down in a lot of areas last year.
U.S. Department of Labor reports that wage growth for private-sector workers slowed to 1.2% from 1.4% during the third quarter of 2021. dataPublished Friday.
The pace is still rapid; this translates to roughly 5% annually for workers. This figure surpasses the trend of 3% that existed before the pandemic. Nick Bunker, Indeed Hiring Lab’s economic research director North America for the Indeed Hiring Lab, said.
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The deceleration suggests businesses are having any easier time finding workers — and therefore may not feel the need to bid up wages as rapidly to attract talent in 2022.
Bunker indicated that Q4 data suggested a slowdown. Bunker said that the data combined with other data suggests that the rapid pace of wage growth seen in the summer and fall might not be what we expect moving forward.
He said, “It is slowing down from 120 to 90 miles an hour. But you still hit 90 which is quite fast.
For workers, a slowdown in the economy could mean more work. Already, inflation has been running at its fastest pace in decadesThis is reducing the substantial raises that workers received.
If wages grow at a slower rate than the cost of living, then the trend will be downward. may eat into their paychecks even more. Bunker stated that workers could experience a net increase if the inflation rate declines by 2022, and wage growth stagnates at present levels.
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As the U.S. economy recovered from its pandemic hibernation, demand for workers soared.
Record numbers of job opportunities were created as the business demand for skilled workers exceeded the available labor supply. Economists say that millions of Americans are still waiting, due in part to continued pandemic fears and care responsibilities, as well as early retirements by older workers. They also suggested that other factors such as increased household savings or employee burnout may have played an important role.
Employees also began quitting in record numbers — a trend that came to be known as the “Great Resignation” — as Americans re-evaluated their work lives and many were confident they could find better, higher-paying jobs elsewhere.
According to the latest wage data released by Labor Department, these challenges in hiring have somewhat decreased.
Bunker stated, “Relatively it’s easier to hire than back in September and August for certain sectors.”
Bunker noted that the highest-paying in-person jobs have seen a jump in wages, especially for those working in sectors such as leisure and hospitality (bars, restaurants and bars) or brick-and-mortar stores, which were also affected by pandemics.
According to Labor Department data., pay growth for leisure and hospitality workers fell to 1.4% during the fourth quarter. That’s down from 2.5% last year in the second and third quarters.
An independent agency report is available at the Job Openings and Labor TurnoverAccording to a survey, the November rate for hiring in leisure and hospitality companies increased after it had fallen three consecutive months.
Pay growth could still accelerate in certain industries. The fourth quarter saw retail trade wages rise to 2.6% from 0.9% and 1.6%, respectively, in the second and third quarters.
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