The Employment Cost Index report shows that growth in compensation remains strong. In Q3 2022, compensation for private industry workers grew by 5.2 percent over the past year, slightly down from 5.5 percent in the previous quarter. While compensation gains eased from the previous quarter, compensation growth continues to be historically high. The increasing likelihood that the US will fall into recession hasn’t deterred employers from raising wages and benefits for workers. Labor shortages across many industries and jobs are driving these rapid pay increases as employers are struggling with recruitment and retention. Workers have more negotiating power. While these wage gains are great for workers, rapid inflation is limiting workers’ growth in purchasing power. Wage growth may have peaked; indeed, it may even further decelerate over the coming year as the projected upcoming recession would reduce the demand for workers. In addition, with the unemployment rate projected to rise to about 4.5 percent in 2023, labor supply problems would also slightly ease. This may temporarily alter the disparity between strong labor demand and constrained labor supply with wage growth possibly decelerating amid cooling in the US labor market. Slower growth in compensation may also lower inflation as both feed into each other. While wage growth may decelerate, it will likely remain higher than 3 percent as 85% of CEOs expect to increase wages by 3% or more over the next year according to The Conference Board CEO Confidence Survey. This means that wage growth may continue to be stronger than the 2 to 3 percent growth observed during the 2010s. But for now, growth in wages and benefits remains strong. Wages and salaries for private industry workers increased by 5.3 percent over the past year, down from 5.7 percent in Q2 2022. Benefits increased by 5.0 percent, down from 5.2 percent in Q2 2022. Wages for manual services workers (e.g., food services, cleaning, personal care) are rising the fastest (8.1 percent over the past year). Nevertheless, all occupation groups are showing elevated wage growth compared to 2019. Transportation and production workers wages grew by 5.9 percent over the past year. This was 5.9 percent for sales and office workers, 4.7 percent for construction, natural resource, and maintenance workers, and 4.1 percent for management and professional workers.Commentary on today’s U.S. Bureau of Labor Statistics Employment Cost Index
March Payrolls: The Calm Before the Tariff Storm
April 04, 2025
February Jobs Report Hints at Growing Uncertainty
March 07, 2025
Stability Underneath January’s Noisy Jobs Report
February 07, 2025
Q4 ECI Wage Deceleration Slows
February 07, 2025
Robust Job Gains Close 2024
January 10, 2025
November Job Gains Rebound from Disruptions
December 06, 2024
Charts
Preliminary PMI indices show no change in weak DM growth momentum in November
LEARN MORECharts
Members of The Conference Board can access all underlying data of the Job Loss Risk Index by Industry in this Excel workbook.
LEARN MORECharts
While a US recession appears to be imminent, it will not look like any other in recent history.
LEARN MORECharts
CEOs’ views of current and future economic conditions remain pessimistic as they prepare for near-inevitable US and EU recessions.
LEARN MORECharts
The US economy appears to be on the precipice of recession.
LEARN MORECharts
Measure of CEO Confidence declined for the fifth consecutive quarter in Q3 2022 and has hit lows not seen since the start of the COVID-19 pandemic in 2020.
LEARN MOREPRESS RELEASE
Survey: In 2024, CEOs Are Most Worried About a Recession & Inflation, But S…
January 10, 2024
PRESS RELEASE
As Labor Day Approaches, HR Leaders Say Hiring
August 29, 2023
IN THE NEWS
CEOs Are Predicting a Mild Recession in the U.S.
June 01, 2023
PRESS RELEASE
Global Productivity Growth Set to Disappoint Again in 2023
May 17, 2023
IN THE NEWS
Dana Peterson on Why Recession is Likely in 2023
April 20, 2023
PRESS RELEASE
Which Industries Will Start Shedding Jobs?
April 05, 2023