Wage Growth Is 'Well Above' Pre-Pandemic Levels, But A Slowdown Is Coming: What To Watch

After a year-and-a-half of rapid pay gains, wage growth registered in Indeed job ads has started to slow, according to new U.S. data from Indeed Wage Tracker.

What Happened: Posted wages grew 6.5% in November, but decelerated significantly from the peak of 9% growth recorded in March 2022.

This indicates that employers looking for workers are preparing for a potential economic downturn by offering lower wages, according to the wage tracker, which focuses on wages and salaries published in job postings on Indeed rather than measuring changes in wages and salaries actually paid to employed workers.

If the trend holds, wage growth would revert to the pre-pandemic range of 3%-4% by the second half of 2023.

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Why It's Important: A slower rate of posted salary increases means that compensation for workers hired to fill available positions will climb more slowly, putting pressure on earnings for employees who stay at their existing jobs, according to HiringLab.

The Sector Breakdown: In what industries is wage growth decelerating the most?

The slowdown in advertised salary increase is widespread and most pronounced in lower-paid sectors, according to HiringLab.

In the great majority of occupational categories, pay increased more slowly in November than it had six months previously.

Only 18% of income categories saw consistent or increasing wage growth from May to November 2022. In comparison, from May 2021 to November 2021, 93% of categories had consistent or stronger improvements.

Wage growth in the the childcare category has slowed by 4.5% since May, but is still up 9.5% year-on-year in November.

Gains in construction employment are closer to the national average, while salary growth has slowed very little.

Wages and salaries in marketing job postings are increasing considerably more slowly than they were earlier this year.

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