US economy grew in 2nd quarter even as interest rates rose
Efforts to curtail inflation so far have not put much of a damper on the overall economy as U.S. GDP increased from April through June.
LEARN MOREPosted: 7:37 p.m. EDT Jul 28, 2023
The U.S. Labor Department has released new data showing that wage and salary increases for workers in the United States have slowed in recent months.
A report from the DOL on Friday showed that wage and salary growth slowed during the quarter from April to June. This is an indication that employers were feeling less pressure to increase pay for workers.
As the Federal Reserve continues to raise interest rates to try to curb inflation, the central bank said it has also been looking at the employment cost index, which is a gauge of pay.
This spring both pay and benefits rose about 1% in the second quarter, according to government data. That was down from about 1.2%, the rate of growth for the first three months of this year.
Policymakers have actually said they worry that rapidly rising wages could have a negative impact on their work to reduce inflation.
The hope from economists is that in trying to cool the economy down, gains in salaries and wages — along with price hikes — will slow, but not cause a jump in the unemployment rate.
The Labor Department said compensation cost increases for the 12-month window that ended in June of this year was at around 4.1% for construction and natural resources, along with maintenance jobs.
That same figure went up by about 5.3% for service jobs.
Lester Jones of the National Beer Wholesalers Association told the New York Times, "Labor's still a problem, the labor market's still tight out there, but firms are starting to figure out how to make do with what they have."
