December Jobs Report Offers Good News: Easing Wage Pressures, Healthy Economy
MorningstarJan 06, 2023
According to new data released by the Bureau of Labor Statistics (BLS), the median American weekly wage for full-time workers jumped 7.4% year-over-year in the fourth quarter of 2022, outpacing the fourth-quarter inflation rate of 7.1%.
Pay raises were even larger for Black Americans, young workers (16-24-year-olds), and the bottom 10% of income workers, who received median wage increases of 11.3%, 10%, and 10%, respectively.
These moderate wage increases are the kind of positive sign that is desperately needed as global inflation continues to bite the average American worker. Rapid wage rises seen last year were one of the reasons inflation became so rampant, so the fact that they haven't quite kept pace with inflation is actually good news. This update reflects the success of the Fed's interest rate strategy, which is balancing the mitigation of rising living costs with a dampening of inflationary pressure.
Although some wage increases finally outpaced the inflation rate last quarter, the average American doesn't yet have cause to celebrate. With year-over-year costs of cereal up 16%, dairy products up 15%, and nonalcoholic beverages up 12%, recent wage gains have done little to counter the pain felt by Americans when shopping for basic living necessities. Biden is overstating economic success, while ordinary citizens struggle to pay their bills and the economy continues to spiral out of control.
There is a 50% chance that the US Federal Minimum Wage will be raised by the end of April, 2025, according to the Metaculus prediction community.