by calculated risk January 5, 2024 12:11:00 PM
I previously posted on my blog some questions for next year. 10 economic questions for 2024. Some of these questions are related to real estate (inventory, home prices, housing starts, new home sales) and we’ll post our thoughts about them in our newsletter (for other questions like GDP and employment , which will be posted on this blog).
For each question, I’m adding some thoughts and maybe some predictions.
7) Wage growth: Wage growth in 2023 was strong, rising 4.0% year-over-year as of November, but slowed from 4.8% year-over-year in 2022. How much will wages rise in 2024?
The wage indicator that gets the most attention is the „average hourly wage“ in the monthly employment report of the Current Employment Statistics (CES) (also known as „Establishments“).
The graph shows the nominal year-on-year change in the „average hourly wage“ of all private sector employees. There was a large increase early in the pandemic as low-wage employees were laid off, but the pandemic-related surge reversed a year later.
The growth rate of real wages has been on a downward trend since peaking at 5.6% year-on-year in March 2022, and reached 4.1% year-on-year in December 2023. Wage growth in December was better than expected, but the trend is clearly down.