Key points:
- Posted wage growth has cooled in recent months after signs of stability, measuring 2.9% year-over-year in June.
- According to federal data, 57% of workers’ pay grew faster than inflation in June, up from a monthly low of 44% during the height of inflation.
- Typically higher-paying occupations, including electrical engineering, legal, and marketing, drove the strength in headline wage growth numbers in June.
Our monthly Labor Market Update examines important trends using Indeed and other labor market data. Our US Labor Market Overview chartbook provides a more comprehensive view of the US labor market. Data from our Job Postings Index — which stood 4.5% above its pre-pandemic baseline as of July 18 — and the Indeed Wage Tracker (including sector-level data) are regularly updated and can be accessed on our data portal.
The rapid pace of wage growth that marked much of the early post-pandemic period, generating headlines and fears of a wage-price spiral that would keep pushing inflation higher, is definitively in the rearview. The Indeed Wage Tracker slowed to an annual growth pace of 2.9% in June, well below its January 2022 peak. Comparable wage growth measures have also slowed but generally remain higher than the pace of inflation, giving workers a boost in real income. But the latest data show that not every American is experiencing the same boost in purchasing power, and many may not be seeing any boost at all —a worrisome turn amid fears of an impending tariff-driven rekindling of inflation.
Wage growth has slowed considerably
As the labor market tightened after the pandemic, annual wage growth as measured by the Indeed Wage Tracker surged to a peak of 9.4% in January 2022. Wage growth then declined steadily through late spring 2024 before showing signs of stabilization at growth rates similar to those seen prior to the pandemic. Through the first half of 2025, wage growth appears to have turned another corner and is slowing again.
The Indeed Wage Tracker measures wage growth by monitoring changes in the advertised pay found in job postings on Indeed. Other measures of wage growth — including the Bureau of Labor Statistics’ Employment Cost Index (ECI) and the Wage Growth Tracker published by the Federal Reserve Bank of Atlanta — track wages differently and focus on existing employees (instead of job postings), but have shown similar patterns in recent years, albeit at more muted levels.
The rapid acceleration in post-pandemic wage growth observed in the Indeed Wage Tracker was echoed roughly six months later in each of those two data series, and all three peaked at roughly the same time in late 2021/early 2022. In the last couple of years, hiring activity and demand for new workers have fallen off across many industries, and growth as measured by the Indeed Wage Tracker is now noticeably lower than these comparable indicators.
Real purchasing power is once again growing, but not for everyone
In a “normal” market, wages should typically grow at least somewhat faster than the pace of inflation, keeping paychecks in line with rising costs of living. During much of the immediate post-pandemic period in 2021, inflation and wages both grew at a rapid pace, with inflation overtaking wage growth for long stretches of 2022 and contributing to an erosion of consumer purchasing power that only meaningfully began to reverse midway through 2024. Today, annual wage growth as measured by the Indeed Wage Tracker remains slightly above the annual rate of inflation as measured by the consumer price index (CPI), which grew at a rate of 2.7% in June. But the gap between the two is the narrowest it’s been in 12 months.
The gap is somewhat wider in other series. In June, the three-month average annual growth in the Atlanta Fed Tracker was 4.2% — or 1.5 percentage points above CPI. On the surface, consistently stronger annual wage growth relative to the pace of inflation, regardless of the measure used, suggests rising purchasing power for workers. But not every worker is experiencing that rebound in real purchasing power.
A detailed analysis of the Atlanta Fed’s wage data shows that 57% of American workers saw their paychecks grow faster than inflation in June. That is roughly in line with the share in 2020, and much improved from a low of 44% in 2022, when the annual pace of inflation peaked. While this return to pre-pandemic levels is an encouraging sign for many American workers and their paychecks, it is sobering for the 43% of workers who aren’t keeping up. The generally rising tide of healthy wage growth is lifting most boats — but not all of them.
High-wage occupations drove the recent rise in wage growth, but are now slowing down
While it is unclear exactly who falls into the 43% of workers not keeping up with increasing prices, Indeed data suggests that it’s most likely those with jobs at the low-to-middle end of the pay spectrum. Historically, much of the rise in posted wages that began in 2021 came from a massive surge in wages for low-paying roles, including in the food preparation & service and childcare sectors. But over the past year, the opposite trend was true, with posted wages in typically higher-paying jobs growing fastest (with some exceptions). However, the annual growth among the highest-paying jobs has pulled back in recent months, while growth has been stable in low- and middle-paying categories. As of June, annual growth in posted wages for high-paying jobs clocked in at an annual rate of 2.9%, while middle and low-paying jobs came in at 3% and 2.8%, respectively.
Despite a pullback in high-wage pay growth, several job titles in that category are still posting strong gains. In June, typically higher-paying jobs still accounted for every spot in the top five list of categories with the fastest growth since last year. Electrical engineering jobs topped the list with a much higher-than-average annual advertised pay growth of 6.3%. Legal and marketing followed, with both recording 5.1% posted pay growth rates compared to last year. On the other hand, high-wage sectors, including physicians & surgeons and software developers, show slower wage growth, ranking lower despite their top-paying status. But that list of slowest-growing sectoral wages is also populated with several low-to-mid wage categories, including driving, beauty & wellness, and logistic support.
Conclusion
Despite cooling from its 2022 highs, overall wage growth remains healthy and above inflation. But while the majority of Americans are seeing raises that outpace price increases, a sizable share are falling behind. Much of the recent strength in posted wage growth has been concentrated in typically higher-paying roles, but that seems to have faded. Low- and middle-wage jobs have seen more modest pay gains at or below the pace of inflation, but are showing signs of stabilization. While wage trends may no longer serve as the primary gauge of inflationary pressure they once were, they continue to reflect what other economic indicators suggest: The labor market is solid, but its benefits are not being shared equally across the economy.
Methodology
To calculate the average rate of wage growth in the Indeed Wage Tracker, we follow an approach similar to the Atlanta Fed US Wage Growth Tracker, but we track job postings, not individuals. We begin by calculating the median posted wage for a given country, month, job title, region, and salary type (hourly, monthly, or annual). Within each country, we then calculate year-on-year wage growth for each job title-region-salary type combination, generating a monthly distribution. Our monthly measure of wage growth for the country is the median of that distribution. Alternative methodologies, such as the regression-based approaches in Marinescu & Wolthoff (2020) and Haefke et al. (2013), produce similar trends.
More information about the data and methodology is available in a research paper by Pawel Adrjan and Reamonn Lydon, What Do Wages in Online Job Postings Tell Us about Wage Growth?
