In December 2024, US Average Hourly Earnings for employees on private nonfarm payrolls increased by 10 cents, or 0.3%, reaching $35.69. This marks a slight slowdown compared to the 0.4% rise in November, but it aligned with market expectations. The data reflects a steady, though slightly moderated, pace of wage growth, which continues to play a crucial role in supporting household incomes amid inflationary pressures.

Earnings for Production and Nonsupervisory Employees Remain Steady

Wages for private-sector production and nonsupervisory employees saw a modest increase in December. Their average hourly earnings rose by just 6 cents, reaching $30.62. This limited growth indicates that lower-level employees experienced smaller wage increases compared to the broader workforce, suggesting that wage gains were not evenly distributed across all job levels.

Wage Growth Slows on a Yearly Basis

On a year-over-year basis, average hourly earnings rose by 3.9% in December 2024, slightly below the 4% increase recorded in November and market estimates of a 4% gain. This deceleration in annual wage growth points to a gradual easing of wage pressures, which could be a factor in reducing inflation concerns. However, wages are still growing at a rate that reflects a stable labor market.

Read More: US Economy Adds 256K Jobs in December 2024

Implications for the Labor Market and Economy

The steady growth in hourly earnings signals that the labor market remains resilient. While wage growth has moderated slightly, it still shows a positive trend that supports consumer spending and overall economic stability. Policymakers and market analysts will continue to monitor wage trends closely, as they play a key role in shaping inflation dynamics and the broader economic outlook for 2025.

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