Weekly wage growth is flagging as work hours stagnate
Amid signs of an economic slowdown and a decline in job creation since mid-2018, one labor-market measure has remained consistently strong: wage growth. Average hourly earnings were up 3.2% year over year in August, according to the Bureau of Labor Statistics’ monthly jobs report.
But growth in a related measure of wages — average weekly earnings — has slowed: from a 3.6% annual increase in October 2018, to 2.9% in August 2019.
“While workers are still employed, and employers are adding more workers, there is some hesitancy about the economy, so employers are perhaps pulling back on hours,” said economist Nick Bunker at the Indeed Hiring Lab. Bunker said average weekly hours worked have been stagnant or falling in the past year.
That’s not surprising, as business owners deal with slowing sales, and pull back on expansion and investment plans.
“Manufacturing is arguably already in a slowdown-slash-recession, construction is suffering, and everybody who’s involved in international trade has been hurt and is paying the tariffs,” said Joe Galvin, head of research at small business advisory firm, Vistage.
Most employers aren’t cutting jobs at this point. But cutting back on regular and overtime hours leaves many workers with less take-home pay. And that could drag down consumer spending going into the holidays.
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