Employment Cost Index rises 1% in Q4 2021, missing forecasts

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US wages rose less than expected in the fourth quarter as the labor shortage charged into 2022

, down slightly from the prior month's count but still well above the pre-pandemic average. The ratio of unemployed-people-per-job-opening held flat at a record-low 0.7, indicating there remained far more jobs listings than workers to fill them.

Pandemic-era quitting intensified as well. A record 4.5 million workers walked out of their jobs in November, marking the fifth consecutive month that more than 4 million people quit. The wave of quits, also known as the"Great Resignation," has also hindered companies' attempts to rehire.in December, making the last month of the year the weakest for job creation.

Most already aren't faring well. Only leisure and hospitality workers saw wage growth outpace inflation through 2021, according to BLS data. All other sectors ended the year with weaker buying power on average, with some even seeing their real wages drop by more than 3%. Other data out Friday confirmed inflation remained red-hot into 2022. The Personal Consumption Expenditures price index rose 5.8% year-over-year in December, also marking the highest inflation since 1982. The core PCE index – which strips out volatile food and energy prices – rose 4.9% year-over-year, the highest rate since 1983 and accelerating from the prior month's 4.7% pace.

With prices still ripping higher, the slowdown in wage gains could put more pressure on workers' wallets through 2022.Subscribe to push notifications

 

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