Wage Gains Show Signs of Slowing Over the Past Few Months

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Wage Gains Show Signs of Slowing Over the Past Few Months
02 Apr 2022
6 min read

News Synopsis

Wages continued to rise in March, but the pace has slowed slightly in recent months, allowing employers to ease the pressure to raise wages as more people return to the workforce. 

Average hourly earnings adjusted 0.4% in March over the last month after a slight rise of 0.1% in February, the Labour Department said. The monthly wage profit was 0.5% on average for the past six months.

According to economists, the past two months of softer wage growth signal that the labour market is starting to cool as more people are going back to work. The share of the adult population either working or working grew to the highest level since March 2020 to 62.4% in March, but still far away from where it was before the pandemic hit the US economy.

Other indicators also suggest that more people are entering the labour market. According to another report by the Labour Department, the employment rate averaged 4.4% last year, up from 3.9% in the year before the pandemic spread.

Michael Pearce, a senior U.S. economist at Capital Economics, has said that the rank-and-file leisure and hospitality workers are making 14.9% more than a year ago but the wage gains in that sector have dropped or held steady for three months straight, which could anticipate cooling wage gains in other parts of the economy.

TWN In-Focus