Wages are on pace to pre-pandemic levels by second half of 2023

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Wages are on pace to pre-pandemic levels by second half of 2023

According to the new data from career site Indeed, the U.S. wage growth has slowed sharply over the past year and is on pace to return to pre-pandemic levels by the second half of 2023.

The wage tracker showed that salaries were up 6.5% from a year ago, up from 6.5% in November. According to the index, there is less competition for new hires, as opposed to a rate of 9% in March.

In November, wage growth fell by 82% of job sectors, as opposed to 6 months earlier, as the deceleration is broad-based.

According to the current trajectory, wage growth will likely return to its pre-pandemic range of 3% to 4% by the second half.

Indeed, the data is a leading indicator because it is based on salaries published in job postings rather than actual wages paid to workers.

According to Indeed labor economist Nick Bunker, the wages and salaries advertised in job postings are a potential canary in the coal mine. The slowing of pay gains in job postings could be a harbinger of what broader measures of compensation will show in the months ahead. The Indeed gauge is in contrast to the Labor Department report released last week, which showed that average hourly earnings surged 0.6% in November, double what analysts anticipated. The report shows that wages are up 5.1% on an annual basis.

The wage growth is closely watched as it tries to combat inflation with the most aggressive rate-hike campaign since the 1980 s. Policymakers have expressed concerns about the possibility of a wage-price spiral, a scenario in which soaring pay growth keeps inflation elevated by pushing businesses to raise prices to offset the cost of labor.

Inflation has an effect on wages, and I think wages have an effect on inflation," Jerome Powell, chairman of the Fed, said after the board's November meeting.

He said I don't think wages are the main story of why prices are going up. I don't think that we're seeing a wage-price spiral. We don't want to see it. We just want them to go up at a level that is sustainable and consistent with 2% inflation.