Key points

  • Posted wage growth rose to 3.3% in August, according to the latest data from the Indeed Hiring Lab.
  • The acceleration is most pronounced in high-wage sectors, with posted wage growth rising from 2.9% in May to 3.3% in August.
  • Yet wages are picking up speed in some low-wage sectors such as Food Preparation and Service, rising to 2.6% in August from 2.3% three months prior.

Our monthly Labor Market Update examines important trends using Indeed and other labor market data. Our US Labor Market Overview chartbook provides a more comprehensive view of the US labor market. Data from our Job Postings Index — which stands 12.7% above its pre-pandemic baseline as of September 13  — and the Indeed Wage Tracker (including sector-level data) are regularly updated and can be accessed on our data portal. 

After declining steadily following an early 2022 peak, posted wage growth stopped declining by late spring 2024. Now, with a couple more months of data, it’s clear that annual wage growth hasn’t just stabilized, but has modestly re-accelerated. Annual posted wage growth as measured by the Indeed Wage Tracker hit 3.3% in August (on a three-month average basis), up from 3.1% in May, when the steady decline first turned around. This strengthening wage growth suggests the US labor market is not weakening rapidly, that job seekers still have options, and that competition for workers is still pushing employers to raise wages at a steady clip to attract workers.

A line chart titled "US posted wage growth is no longer fading" covers data from January 2019 to August 2024. The chart shows year-over-year wage growth, with a peak of 9.3% in 2022, followed by a decline to 3.3% in August 2024. The recent trend suggests that wage growth, after a steady decline, is stabilizing, indicating that the sharp wage increases seen post-pandemic have subsided, but growth remains positive.
A line chart titled “US posted wage growth is no longer fading” covers data from January 2019 to August 2024. The chart shows year-over-year wage growth, with a peak of 9.3% in 2022, followed by a decline to 3.3% in August 2024. The recent trend suggests that wage growth, after a steady decline, is stabilizing, indicating that the sharp wage increases seen post-pandemic have subsided, but growth remains positive.

The rebound in posted wage growth is showing up across a variety of sectors, with growth higher in August than in May across low-, middle- and high-wage tiers. The increase was most pronounced for high-wage sectors, which include Software Development and Banking & Finance, with wages across these sectors rising 3.3% year-over-year in August, from 2.9% in May. Middle-wage and low-wage sectors saw more muted increases over the same time period, to 3.5% from 3.3% and to 3.4% from 3.2%, respectively. The rebound for high-wage sectors may partly reflect the high-wage labor market hitting its floor and then bouncing back. This rise at the high end of the market helped close the growth gap between high- and low-wage jobs, with the gap currently the narrowest it has been since January 2021.

A line chart titled "Wage growth is rebounding in higher-wage sectors" covering data from March 2019 to August 2024. The chart shows year-over-year wage growth for low-, middle-, and high-wage sectors. Low-wage roles peaked at 11.5% in 2022 but have since declined to 3.4%. Middle-wage roles peaked at 8.6%, now at 3.5%, and high-wage roles peaked at 7.6%, now at 3.3%. The chart suggests wage growth is stabilizing after the post-pandemic surge, with higher-wage roles showing some signs of a rebound.
A line chart titled “Wage growth is rebounding in higher-wage sectors” covering data from March 2019 to August 2024. The chart shows year-over-year wage growth for low-, middle-, and high-wage sectors. Low-wage roles peaked at 11.5% in 2022 but have since declined to 3.4%. Middle-wage roles peaked at 8.6%, now at 3.5%, and high-wage roles peaked at 7.6%, now at 3.3%. The chart suggests wage growth is stabilizing after the post-pandemic surge, with higher-wage roles showing some signs of a rebound.

While the higher end of the wage distribution has experienced a notable acceleration in wage growth, low-wage sectors are seeing more stability. The Food Preparation & Service sector is a good example. Posted wage growth for waiter and bartender jobs has been on a roller coaster ride over the past four-plus years, dropping to almost 0% during the summer of 2020 and then peaking at more than 15% in early 2022. By August, growth had fallen back to 2.6%, which is up slightly from the spring but below its pre-pandemic pace. Steady wage growth in this sector is likely at least partly attributable to continued elevated demand for new workers in these roles. Job postings in this sector were up 12% from their pre-pandemic baseline as of mid-September, according to the Indeed Job Posting Index.  

A line chart titled "Posted wage growth for Food Preparation & Service roles is stabilizing" covering data from March 2019 to August 2024. The chart shows that wage growth for these roles peaked at 15.4% in early 2022 and has since gradually declined to 2.6% by August 2024, indicating a period of wage stabilization after a sharp increase during the pandemic recovery phase.
A line chart titled “Posted wage growth for Food Preparation & Service roles is stabilizing” covering data from March 2019 to August 2024. The chart shows that wage growth for these roles peaked at 15.4% in early 2022 and has since gradually declined to 2.6% by August 2024, indicating a period of wage stabilization after a sharp increase during the pandemic recovery phase.

Both the current pace of wage growth and its recent acceleration, however slight, are positive indicators for the US labor market. The pickup from earlier this year signals that competition for new hires, while down from recent highs, has not faded so much that employers no longer feel compelled to raise wages to attract workers. At the same time, the pace of posted wage growth is well within sustainable levels and is on par with levels recorded prior to the pandemic. Other labor market data paint a dimmer view of the current state of the labor market, but the latest Indeed Wage Tracker data should somewhat brighten the mood.

Methodology

To calculate the average rate of wage growth, we follow an approach similar to the Atlanta Fed US Wage Growth Tracker, but we track jobs, not individuals. We begin by calculating the median posted wage for a given country, month, job title, region, and salary type (hourly, monthly, or annual). Within each country, we then calculate year-on-year wage growth for each job title-region-salary type combination, generating a monthly distribution. Our monthly measure of wage growth for the country is the median of that distribution. Alternative methodologies, such as the regression-based approaches in Marinescu & Wolthoff (2020) and Haefke et al. (2013), produce similar trends.

More information about the data and methodology is available in a research paper by Pawel Adrjan and Reamonn Lydon, What Do Wages in Online Job Postings Tell Us about Wage Growth?