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PayScale Index Q3 2019: Mild Wage Growth Across U.S. Despite Record Low Unemployment

Topics: Comp Strategy

Organizations need precise and timely data, along with the capabilities to accurately analyze that data, to make informed decisions about allocating a limited compensation budget. This is important both on the macro level of developing competitive compensation strategies and also on the micro level of determining market-based pay for individual employees. Including The PayScale Index as a resource can keep you informed of economic trends.

Our recently released 2019 Q3 Index shows that despite record low unemployment, we are still seeing mild wage growth across the U.S. The Q3 Index revealed nominal wages increased by just 0.5 percent quarter over quarter (Q/Q) or 2.6 percent year over year (Y/Y).

“Unemployment numbers hit a record low of 3.5 percent in September. This was not surprising with job growth averaging 161,000 new jobs per month for the first nine months of the year,” said Sudarshan Sampath, Director of Research at PayScale. “However, we are now seeing this remarkable job growth begin to slow, as the economy loses some of its spark. We expect wage growth to remain at its steady rate in the coming months as a result.”



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Consistent with the rest of the 2019 quarterly indexes, San Francisco continues to be the dominate metro area seeing the highest wage growth in the United States, as nominal wages grew 1.3 precent q/Q and 4.3 precent Y/Y. In similar fashion, following close behind, Seattle has shown 1.4 precent Q/Q and 4.0 precent wage growth Y/Y.

In Pittsburg, after three quarters of lackluster growth, wages jumped 2.3 precent Q/Q and now has a 3.7 precent wage growth Y/Y, making it the 4th fastest in the country! Similarly, Cleveland showed a strong rebound with 1.8 precent wage growth Y/Y.

Meanwhile, Houston wage growth was the slowest in the nation, falling -0.6 percent Q/Q and posting only 0.5 percent wage growth Y/Y. This is likely due to the fluctuations in the energy markets and the impacts from the late summer tropical storms.


On the jobs side, we saw strong wage growth for transportation jobs, while art & design occupation fared poorly. Transportation occupation wages grew an impressive 2.9 percent Q/Q and now post 4.9 percent Y/Y. This is likely due to the lagging impact of consumer spending (specifically increased demand for goods) from other high wage occupations throughout the economy (e.g. tech) from earlier in the year. Marketing and advertising jobs also posted notable nominal wage growth. Nominal wages grew 2.9 percent Y/Y and 0.2 percent Q/Q.

Art and Design and social service jobs were at the bottom of our list for nominal wage growth. Nominal wages for art & design jobs grew 1.1 percent Y/Y and fell 0.3 percent Q/Q. Nominal wages for social service jobs grew 1.3 percent Y/Y and grew only 0.1 percent Q/Q.



The arts, entertainment and recreation industry showed strong nominal wage growth at 3.4 percent Y/Y and 1.2 percent Q/Q. Similar to transportation occupations, this could be due the economic impacts of increased discretionary spending from other occupations coupled with a tight labor market.

Both manufacturing and the energy & utilities industries show lackluster wage growth Manufacturing wages grew 0.4 percent Q/Q and 2.3 percent Y/Y. Similarly, Energy & utilities grew only 0.5 percent Q/Q and 2.3 percent Y/Y.


See the entire interactive Q3 2019 PayScale Index, including wage trends across major metro areas, industries and job categories in the U.S. and Canada. Or learn more about the methodology of the PayScale Index here.

Nicole Tessier
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