Delivery workers, servers, salespeople have seen their salaries soar in the United States for two years, due to a major labor shortage. Timid signs of moderation seem to be appearing, an essential condition for high inflation to slow down, but the risks remain.
The average hourly wage saw its weakest growth in December since August 2021: “4.6% compared to December 2021, against” 4.8% in November, according to data from the Labor Department released on Friday.
These figures show that wage growth is “slowing down”, commented Ian Shepherdson, economist for Pantheon Macroeconomics, in a note.
This is “essential for inflation to remain low” once it starts to slow, he explains.
The peak was recorded in March, with an increase of 5.6% over one year.
“We are seeing a reduction in the pressure on wages,” said Nela Richardson, chief economist of ADP – a company that manages wage payments and publishes a monthly survey on private employment.
“It’s positive, because for inflation to slow down, wages need to grow at a healthy pace,” she said.
But this slowdown is less good news for workers, because “wages, even at high levels, do not follow too high inflation”, she qualified.
The two curves are close, however, since at the same time, inflation slowed in November, to 7.1% over one year, according to the CPI index, on which American pensions are indexed.
Soaring wages, however, “remains a risk for inflation, especially in consumer services,” still warns the economist.
Labor shortage
Because the situation remains tense.
“Companies are still forced to raise wages to retain workers and are struggling to fill vacancies,” Julia Pollak, chief economist for job posting site ZipRecruiter, told AFP.
“So the upward wage pressure will continue for the foreseeable future,” she anticipates.
Especially since the lack of manpower is likely to continue.
This shortage is “structural”, and there are “4 million people who are missing”, indicated, in December, the president of the American central bank (Fed), Jerome Powell.
In question, many retirements since the start of the pandemic, which has also killed 1.5 million people. But also insufficient immigration, linked to the policy of former President Donald Trump, then to the closure of American borders for a year and a half because of COVID.
Consequently, American employers, for the past two years, have been unable to find enough cleaning staff, drivers, teachers, etc. And, to attract candidates, offer better health insurance, flexible or reduced hours, the possibility of telework, and money.
Double-digit increases
So in April 2020, when the United States was in turn confined, wages had jumped 8% compared to April 2019, according to data from the Labor Department.
Retail and healthcare workers, on the front lines despite the risks, had seen the first big increases.
The hotel industry, transport and logistics were followed, where “salaries are relatively low”. Non-managerial workers have been getting double-digit pay rises for a while,” Julia Pollak detailed. »
Opposite, the sirens of telework and its many advantages were widely appealing. But the slowdown in wage growth is now an important element for the Fed in its fight against inflation. Indeed, it is deliberately slowing economic activity with its rate hikes, at the risk of pushing up the unemployment curve.