Tuesday, December 22, 2015

Wages Picking Up?

Unemployment has been falling steadily for about six years now, but wages haven't really kept pace. For the past five years, annual wage increases have averaged a meager 2 percent, but many economists feel that salaries are about to pick up.

Here's why: Joblessness has fallen to a seven-year low of 5 percent from a 26-year high of 10 percent in 2009. Because of that, there are now 1.5 unemployed job seekers for every posted opening, down dramatically from a 2009 high of 6.8. That's even lower than the level at the end of the last economic expansion.

Some people have already seen the benefits of the tighter labor market: workers are showing more willingness to leave a job. The quits rate, which shows the willingness of employees to leave their jobs, was at 1.9 percent in October, up from 1.3 percent in 2009 and nearly at the 2 percent average we saw during the last expansion.

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