The March 2022 jobs report shows strong gains: direct announcements

Wages soared in the year to March, with the labor shortage holding back employers and pushing for higher wages to attract workers – and a signal that rising wages could raise inflation will put pressure on the Federal Reserve. How much, how quickly the economy cools down.

At a time when inflation is running at a pace not seen in 40 years, the central bank is trying to reduce demand to a more sustainable pace. Officials began raising interest rates in March and suggested a half-percent increase in May – more than twice as much as usual. Making more money for borrowing and spending will slow down consumption and ultimately reduce hiring, pay and price growth.

The employment report on Friday strengthens the case for the exaggerated increase.

Wages have risen 5.6 percent in the past year, a report on Friday showing that annual wage gains are much faster than the usual 2 to 3 percent in 2010. At the same time, the unemployment rate fell to 3.6 percent from 3.8 percent. Unemployment is now slightly higher than it was half a century before the epidemic.

“The pre-year wage figure is running very strong; this puts an end to any debate over whether the unemployment rate sends a credible, credible signal to the job market,” said Michael Feroli, JPMorgan’s chief economist. “The job market is tight.”

While a strong labor market may give policymakers hope that the economy can ease somewhat, such rapid wage gains will help sustain consumer demand and motivate companies that raise more labor to raise prices. Costs.

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“The promise of a pay rise is a big deal,” said Jerome H. Snyder, chairman of the central bank. Powell said this after the central bank’s decision last month to raise interest rates in an effort to cool the economy. But the increases “will be higher than our target of 2 percent inflation over time.”

According to March figures, Mr. Wages are rising faster every year than they were when Powell made his point.

Occupation (top to bottom)

Education and Health

+5

+10

+15

+20

+ 25%

’19

’20

’21

’22

All industries

All industries

Leisure and hospitality

Leisure and hospitality

Production

Production

Education and Health

Education and Health

Construction

Construction

Business services

Business services

As employers compete for limited labor, rapidly rising wages are coming. There are approximately 1.8 jobs per unemployed worker, and companies complain that they find it difficult to hire in a variety of skills packages and industries.

“If it is too tight, the wage-price cycle will only accelerate from here,” he said. Feroli said. He said of the central bank, “I think they think it is unsustainable.”

Over the past year, wages for workers have risen significantly Leisure and hospitality Industry rose 14.9 percent, while workers in transportation and warehouses received double-digit wage gains. Those figures are for workers who are not supervisors.

Wages Significantly climbed In retirement and hospitality again last month, wages for workers in the financial and durable goods industries rose sharply.

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While rapid wage growth is a boon to many workers, families are not buying into rising prices, even though their paychecks are large. Wage gains are not compatible with inflation for many workers.

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