- Total wages and salaries continued to rise in July, according to the Bureau of Economic Analysis.
- Economist AnnElizabeth Konkel said wages are “moving in the right direction”.
- But the ongoing pandemic and its impact on workers are still being felt across the economy.
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July brought some promising signs of economic recovery with rising wages and incomes, according to the Bureau of Economic Analysis newest release.
In fact, wages and salaries are approaching the trends seen before the pandemic, according to economists at Jobsite Indeed. It’s another promising sign since the
simultaneously Hints that the recovery is going in the right direction.
“Wages and salaries are almost back to their pre-pandemic trend – not quite yet – but they are certainly moving in the right direction. And that’s really promising, ”AnnElizabeth Konkel, economist at Indeed, told Insider.
This means that the restoration is not entirely complete. It’s not bad news, but instead highlights some of the factors that are still affecting the economy – and the data sheds light on programs that are increasing Americans’ incomes. For example, the first round of child tax credits in July accounted for over 1% of personal income, according to Indeed’s calculations.
The graph below, replicated from analysis by Indeed’s latest Bureau of Economic Analysis, shows that aggregate wages and salaries were closer to pre-pandemic trends than in previous months.
Total wages and salaries in July were $ 10.25 trillion. As the graphic shows, wages and salaries in July were just 0.8% below the pre-pandemic trend. In June, wages and salaries were 1.4% below the pre-pandemic trend.
As the US continues to recover, here are three things that are still affecting the economy.
(1) Despite a glimmer of hope this summer, the pandemic is still raging
“The main reason they are still below this trend and haven’t hit it is that we are still in a pandemic,” Konkel said.
Delta cases have increased across the country, and in some cases Closing schools and Plans to return to the office. Workers get back to work faster more vaccinated areas. Care is an important factor held parents meaningful return to work or from advance their careers (and salaries).
“There are still concerns about the Delta variant and what happens in the fall when the Delta variant collides with the school year,” said Konkel.
(2) The labor market is in a transition phase
“I think we are currently going through an adjustment phase. The recovery in the labor market is certainly not turning off and on,” said Konkel.
So far the job market has been very hot – with a mix of both Job vacancies high and Wages explode how Workers quit en masse – and still filled with millions of unemployed. This is why tales of a labor shortage are complicated; some employers certainly have difficulty hiring, but workers lag behind for a variety of reasons. Or they could at a. To suffer Mismatch in open roles and own skills.
“Right now there are so many moving factors. Take a step forward and think of the individual job seekers and the fact that so many people are confronted with so many different things right now, ”said Konkel.
(3) September will bring more clarity about what’s next
Konkel said we should look to September to see what happens next to the job market as schools reopen and federal unemployment benefits become switch off, and the country may see the result of increased vaccination rates. It is important that today’s data release reflected July – when the delta variant was just beginning to take hold.
“I think we will get more clarity and say, okay, is there a labor shortage or are these just factors for childcare,” said Konkel.