For a new job, American workers are expecting roughly $80,000 annually
This year, the amount of money most workers want to accept a job reached a new high, indicating that inflation is alive and well, at least in the labour market.
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According to the most recent New York Federal Reserve employment survey, the average "reservation wage," or the minimum acceptable compensation offer to switch jobs, increased to $78,645 in the second quarter of 2023.
8% rise from the previous year
This is a rise of roughly 8% from a year ago and the highest level ever recorded in a data set dating back to the beginning of 2014. The level has increased by more than 22% in the last three years, which includes the COVID-19 epidemic phase.
The figure is significant since wages are now widely acknowledged as an inflationary force. While the total inflation rate has decreased since peaking at its greatest level in more than 40 years in the middle of 2022, other variables have kept it substantially above the Federal Reserve's goal rate of 2%.
The New York Fed data is consistent with a tracker from the Atlanta Fed, which indicates that while overall salaries are increasing at a 6% annual rate, job changers are experiencing 7% rises.
The average full-time offer has increased by 14% over the past year to $69,475, as employers struggle to keep up with wage demands. The actual predicted yearly wage increased to $67,416—a new high and an increase of more than $7,000 from the previous year.
Although there was a discrepancy between the wage workers desired and what was provided, overall satisfaction with pay and opportunities for advancement grew.
More indications of a tight labour market increase the possibility that policymakers will maintain interest rates higher for longer, as markets are uncertain about the Fed's future course of action.
Inflation target of 2%
According to meeting minutes, officials highlighted during their July meeting that salaries continued to rise faster than levels considered to be consistent with a continued achievement of the 2% inflation target.
The poll results on Monday also revealed some other erratic trends in the labour market.
The percentage of people looking for work, or those who have done so in the last four weeks, fell from 24.7% to 19.4%. According to the U.S. Bureau of Labour Statistics, that occurred as job opportunities decreased by 738,000 to 9.58 million.
The possibility of changing employment decreased from 11% to 10.6% from a year earlier, while hopes of receiving a job offer similarly decreased from 21.1% to 18.7%.
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