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U.S. Labor Market Continues to Improve but with Less Buoyancy

Ahu Yildirmaz, Ph.D. Vice President, ADP Research Institute

We have just released the latest ADP Workforce Vitality Report, and it indicates that the labor market maintained its trend of growth in wages in the second quarter of 2016. The U.S. labor market continued to improve in the second quarter of 2016, but is less buoyant than it was at the end of 2015. Gains in the second quarter were driven by growth in hours worked and employment.

Tracking the same set of full-time workers gives us a truer picture of wage growth among those who are consistently employed. Full-time job switchers fared better than job holders. Their wage growth rate slowed slightly, whereas holders’ growth rate slowed by more than a percentage point from the previous quarter on a yearly basis. Wage growth on a year-ago basis was moderate largely because of an unfavorable year-ago comparison.

Annual Wage Growth 2Q 2016

The positive trend in wage growth over the past few quarters suggests that wages may finally reflect the tightening labor market. Employers are continuing to provide raises to their workers for retention.

Are you making changes in your employee compensation to stay competitive?

To learn more about workforce trends related to wage growth, visit:

1 Comment

  1. These days every business is growing , you just need to work hard and work hard (Again).

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