The high-octane, stimulus-fueled economic rebound, combined with the “Great Resignation” labor crunch, has forced U.S. employers to lift wages sharply to attract and retain staff. But while January’s over-the-year wage gains are positive in nominal terms, they disappoint in real terms, as the red-hot pace of inflation means that many U.S. workers effectively took a pay cut.
Average hourly earnings of all private-sector employees rose by 23 cents to $31.63 in January for an over-the-year increase of 5.7 percent, according to the latest earnings data from the Bureau of Labor Statistics (BLS). The number came as an upside surprise to forecasters, who expected a more modest 5.2 percent rise after wages grew by 4.9 percent in the 12 months through December 2021.
