Over the past year, Americans have seen their paychecks get bigger and bigger, and that trend continued in April.
In April, the average employee made $31.85 an hour, according to the latest employment data release from the Bureau of Labor Statistics. A year ago, they were making $30.20 an hour — a 5.5% increase.
It's not a new trend: Wages have been on the rise for the past year, as employers scrambled to staff up and workers sought out higher wages.
But while pay did grow in April, it wasn't as fast as expected. Economists surveyed by Bloomberg estimated that average wages would grow by 0.4% over the month in April. Instead, the 10 cent rise from March marked a 0.3% increase — a bit of a slowdown.
"I think across board we are seeing that wages are coming back to earth after a particularly strong 2021. Really, 2021 is when we saw job openings shoot through the roof and wage growth follow it," Daniel Zhao, senior economist at Glassdoor, told Insider. "What we're seeing in 2022 is more moderate. Wage growth is still year-over-year very healthy."
Wage expectations are still high. According to a Glassdoor analysis, job seekers' expectations for how much they'll make in a new role have grown by 43% over the past year. That's higher than the rate that wages have been climbing. Over half of Americans who quit in 2021 and are currently working are making more than they did in their old job, according to a survey from the Pew Research Center.
Most industries saw their average hourly earnings increase over the month with mining and logging leading the way with an increase of 1.12% from March 2022 to April 2022. However, retail trade and utilities actually saw a decline in wages over the same period. Despite a drop over the month, these wages in these two industries are still higher than they were a year ago.
Nick Bunker, economic research director at Indeed Hiring Lab, told Insider that, based on production and nonsupervisory employees' slowing wage growth over the last several months, perhaps "employers aren't having to bid up wages as quickly as they were at points last year."
Wage increases are coming up against one of the biggest forces chipping away at workers' paychecks: Inflation.
"The elephant in the room in the wage growth discussion is inflation," Zhao said.
Prices have been soaring over the last year, with inflation reaching a 41-year-high in March. From March 2021 to March 2022, consumer prices rose by 8.5% — several percentage points higher than 5.6% wage growth over the same period.
"The dichotomy or sort of dilemma we're seeing with wage growth right now is that in nominal terms, it's very strong and by some measures stronger than we've seen in several decades, but inflation obviously remains incredibly high," Bunker said.
"Inflation is chipping into those gains," Bunker added. The "trillion dollar question right now," is when — and if — inflation will come down, he said.
But the US recovery is looking strong, with an unemployment rate of 3.6% in April, close to February 2020's rate, and a nonfarm payroll gain of 428,000. Bunker said the labor market is seeing a quick recovery from the pandemic's impact.
