Wage Gains Remain Strong

Reuters (08/05/23) Mutikani, Lucia

The U.S. economy added fewer jobs than expected in July, but solid wage gains and a decline in the unemployment rate back to 3.5% pointed to continued tightness in labor market conditions. With the labor market still tight, wages continued to rise at a brisk clip. Average hourly earnings climbed 0.4%, matching the gain in June. That kept the year-to-year increase in wages at 4.4%. Wages are now rising faster than inflation, boosting households’ purchasing power and underpinning consumer spending as well as keeping the overall economy afloat.

The average workweek fell to 34.3 hours, the second shortest since the initial wave of the Covid-19 pandemic more than three years ago, from 34.4 hours in June. Aggregate hours worked across the private sector dropped, reversing some of June’s rise. The shorter workweek and slowdown in payrolls gains likely reflected the end of pandemic labor shortages in most sectors and high-profile layoffs in the technology area and industries sensitive to interest rates earlier this year.

This article originally appeared on reuters.com. Use this link to see the full article: US job growth slowing, but wage gains remain strong