U.S. Trend Wage Inflation Stabilizes Near 2017-19 Levels as Labor Market Balances
Updated
Updated · Liberty Street Economics - · May 26
U.S. Trend Wage Inflation Stabilizes Near 2017-19 Levels as Labor Market Balances
1 articles · Updated · Liberty Street Economics - · May 26
Recent months show Trend Wage Inflation leveling off near its 2017-19 average after a steady decline from a late-2021 peak, suggesting the earlier moderation in underlying wage growth has largely run its course.
Most of the drop from 2022 to 2025 was broad-based across industries, matching a labor market that has steadied—unemployment has changed little since late summer and the HPW Labor Market Tightness Index has hovered near 0.
Construction and mining have broken from that economy-wide pattern, with persistently stronger wage growth since 2022; the analysis points to industry-specific pressure rather than a stronger response to common labor-market forces.
Public administration also shows delayed, idiosyncratic wage dynamics, while the narrower gap between wage and trend price inflation than in the late 2010s suggests households' real earnings are growing more slowly.
Looking ahead, sector-specific pressure—especially in construction, potentially tied to AI data-center building and lower net immigration—could keep wage inflation elevated, while any broader labor-market weakening could push it down again.
Is booming demand in sectors like construction creating a permanent wage divide across the US workforce?
Why are top earner wages soaring while most American paychecks barely keep up with rising costs?
As the US labor force stops growing, how will the economy adapt to a future of permanent worker shortages?