What the Fed doesn't want? Worker "job-hopping" pay expectations hit a near-decade high

According to the latest employment survey released by the New York Federal Reserve on Monday, in the second quarter of 2023,"Average retention pay," the minimum acceptable wage for changing jobs, rose to $78,645, up about 8 percent from a year ago and the highest since March 2014In the past three years during the COVID-19 era, this level has risen by more than 22%

This number is significant because people are increasingly aware ofWages are a driver of inflationAlthough inflation has fallen from its highest level in more than 40 years in mid-2022, other factors are still keeping it well above the Federal Reserve's 2% target rate.

In addition,Wages have been the focus of the Federal Reserve's fight against inflationIn June this year, Federal Reserve Chairperson Jerome Powell said,Curbing wage increases is an important part of the goal of reducing inflation to 2%The overall U.S. CPI recorded an annual rate of 3.2% in July, up from 3% in June

The New York Fed's data is almost in line with data tracked by the Atlanta Fed, which shows overall wage growth of 6% a year, but 7% for those who change jobs.

Employers have been struggling to keep pace with wage demands.The current average salary for full-time employees has increased to $69,475, an increase of 14% from last year.。The actual expected annual salary is $67,416，More than $7,000 more than a year ago, a record high。

The New York Fed says,People who want to change jobs earn $78,645 a yearThe average annual salary over the past four months was $69,475.

Although there is a gap between what workers want and what employers offer, the former's satisfaction with pay and its upward trend has improved across the board.

More signs of a tight job market increase the likelihood that policymakers will maintain high interest rates for longer as markets fret over the Federal Reserve's next policy move. At the July meeting, officials noted,Wages are "still growing at a rate above the sustained 2 per cent inflation target"。

If businesses' spending goes up with wages, they usually raise prices to accommodate this. As prices go up, workers will ask for higher wages to help them keep spending, and so on. This isIndustrial foreign exchangeWhat economists call a "wage-price spiral."

But that's not to say wages should stop rising altogether, as Powell once said:

"Wages will continue to grow and what we're saying is wage growth is still at a very strong level, but over time that should be consistent with 2 per cent inflation."

Powell did not specify what level would be consistent with the Fed's inflation target, but the current situation shows that the Fed has clearly not met its target.

mixed happiness

Monday's survey results also revealed some other mixed patterns in the labor market.

According to a New York Fed survey,The proportion of job seekers who had looked for a job in the past four weeks fell to 19.4% from 24.7% a year earlier.Meanwhile, according to the Bureau of Labor Statistics,The number of vacancies decreased by 738,000 to 9.58 million.

The likelihood of workers switching jobs fell to 10.6% from 11% a year ago.The expectation of getting a new job also fell from 21.1% to 18.7%, and the average expected likelihood of getting multiple job offers over the next four months fell from 25.7% to 20.6%.

In addition, the data shows that...3.9% of respondents expect to lose their jobsThis is up from 2.3% in July 2022 and the highest level since March 2020.