The U.S. information sector saw the biggest increase in what employers pay in wages for the last quarter of 2022 at 1.6%.
And that’s an acceleration from the previous quarter.
The overall increase in the employment cost index (ECI), which includes wages and benefits, was 1.0% from the fourth quarter of 2022 and 5.1% for the year.
The ECI is the best measure of wages, and the Federal Reserve is worried that rising wages will continue to fuel inflation.
The Fed is widely expected to raise its benchmark interest rate by 25 basis points to a range of 4.5%-4.75% after its two-day meeting ends on Wednesday. It began raising rates last March in response to rising inflation.
See: Fed set to deliver quarter-point rate hike along with ‘one last hawkish sting in the tail’
Many of the highest paying jobs are seeing the biggest price gains.
Following the information sector, wages are rising fastest in financial services which showed a rise of 1.4%.
The leisure and hospitality sector has been closely watched as an industry where wages have been growing at a rapid clip over the past two years in the wake of the coronavirus pandemic, but the final quarter of 2022 showed a shift away from that growth. Wages grew by only 0.9%, compared to a nearly 2% rate in each of the first three quarters of 2022. “Other services, except public administration” is the sector with the slowest rises in wages at 0.7%. Slightly ahead is professional and business services, growing at 0.8%.
The nine supersectors being compared are: construction; manufacturing; trade, transportation, and utilities; information; financial activities; professional and business services, education and health services, leisure and hospitality, other services, except public administration.
Wages in have accelerated in the past two years
While employer costs for wages have grown more-or-less consistently since the Great Recession of 2008-2009, the years following the onset of the pandemic have seen accelerated growth alongside inflation.
Wages by supersector sorted by the largest change in the latest quarter