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In a July consumer survey, the New York Fed found record salary expectations
According to a study released Monday by the Federal Reserve Bank of New York, American workers’ salary expectations increased in July, even as they anticipate a slightly less vibrant labor market.
Respondents told the bank they’d expect an annual salary offer of $67,416 if they were offered a job, a new high in a study that began in 2014, and an increase over the $60,310 indicated a year ago. “The increase was broad-based across age, education, and income groups, but was most pronounced for respondents over 45 and college graduates,” according to the report.
Meanwhile, respondents to the bank’s Survey of Consumer Expectations said the lowest income they’d accept for a job increased to a record $78,645, up from $72,873 a year ago.
Workers’ expected wages differed from what they really received. According to the poll, the average income provided for a full-time job in July was $69,475 compared to $60,764 in July 2022.
The increase in income, both actual and predicted, occurred despite some softening around the edges of the job market, according to poll respondents. According to the poll, there has been a slight decrease in the number of persons who claimed they had changed occupations, as well as a decrease in the number of people who stated they were looking for new work.
Looking ahead, respondents stated the likelihood of switching jobs was 10.6%, down from 11% in the July 2022 survey. Respondents also believe their prospects of receiving a job offer in the next four months have decreased.
Labor market expectations are reported quarterly by the New York Fed as part of a data series best recognized for tracking the predicted direction of inflation and household financial situations. The fresh data comes just days before Fed officials meet with other world leaders in finance at a research conference in Jackson Hole, Wyoming.
Fed officials are still debating whether they should continue raising interest rates at a time when inflation is high but declining. Despite a historically aggressive rate-hiking campaign, economic growth and job markets remain solid.
According to the New York Fed data, there is still a risk that wage rises and expectations of salary increases will put some upward pressure on inflation, raising the possibility that the central bank would have to raise rates further.
However, there is an ongoing discussion about how growing wages are a driver of inflation at a time when many other sections of the economy are dealing with interruptions caused by the coronavirus outbreak.
A recent Cleveland Fed article, although highlighting the significant job gains, framed them as a reaction to economic developments, stating that “we find that the increase in wage growth largely reflects the pass-through of higher inflation and does not reflect labor market imbalances.” The authors of the report anticipate that wage growth will slow.