In the fourth quarter, it was reported that wages grew by 1%. For the year wages increased by 5.1%. This is good news, however, the increase in wages wasn't able to keep up pace with the rising inflation levels. Even though wages still grew in the fourth quarter, the growth was slower than in previous quarters. Many predict that wages will continue in a downward spiral as the demand for workers has cooled down. The questions now lie in how and when the descent will end. When adjusted for pricing, wages, and salaries actually decreased for the year by 1.2%. The FED has to keep a close eye on this wage growth in relation to inflation because they will be making a decision today on how much to adjust interest rates by. The leisure and hospitality industry sustained the most year-to-year growth at 6.4%. This is the only group that has seen their wages keep pace with the inflationary environment.
https://www.cnn.com/2023/01/31/economy/workers-wages-fourth-quarter
2 comments:
This a great post, I agree that Fed should be concerned about wage rates compared to inflation and interest rate. Otherwise, the country can face high unemployment and may face problems seeing growth.
It's almost as if the job market and wages are pushing back and giving resistance against the FED trying to slow the economy. Although the wage rates haven't been increasing with inflation, hopefully, the FED will be able to successfully perform the soft landing to bring inflation back down to where wages don't fall in that downward spiral.
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