Wage growth is accelerating in several key industries, foreshadowing stronger gains across the economy, experts say.
Pay hikes have picked up in sectors such as leisure and hospitality, business services, construction and retail, Labor Department figures show.
“There is evidence that a cyclical upturn in wage growth is underway,” says economist Paul Dales of Capital Economics.
Despite monthly job growth that has surged well over 200,000 this year, average annual wage gains remain stuck at 2% — barely enough to keep pace with inflation.
Employers’ failure to provide bigger raises has crimped consumer spending, which makes up 70% of the economy.
But there are mounting signs that pay hikes are poised to gain momentum in the second half of the year, Dales and other economists say. Wages in leisure and hospitality were up 2.7% in June from a year ago, vs. a 0.6% annual increase in June 2013.