MNI BRIEF: US Pay Gains Stabilizing At Higher Rate -ADP
MNI (WASHINGTON) - U.S. private sector pay gains accelerated unexpectedly in November after having stabilized above pre-pandemic rates, perhaps a sign that wage growth is too high to be consistent with the Fed's inflation target, ADP Chief Economist Nela Richardson said Wednesday.
Gains for job stayers rose for the first time in 25 months last month, edging up a tenth to 4.8%, according to the payrolls processor's analysis of data on more than 25 million U.S. employees. Job switchers also saw a "significant" jump in annual pay of 7.2%, up from 6.7% in October, Richardson said.
"It doesn't sound like a lot, a tenth of a move, but it is when you think that we are stabilizing at a growth rate that is higher than the pre-pandemic level," Richardson said, adding it's worth asking if the current pace of wage growth is consistent with 2% inflation. Fed officials have said the labor market is operating at a sustainable level and is not a driver of higher prices. (See: MNI INTERVIEW: Ex-Trump Economist-Fed Will Mistakenly Pause)