With earnings on the rise, 6 in 10 workers still worry over inflation impacts

With earnings on the rise, 6 in 10 workers still worry over inflation impacts


Surprise abounded in the latest “blowout” payrolls report: The U.S. economy exceeded job-growth expectations in January, wages increased above forecast, and unemployment fell lower than predicted.

At-a-glance highlights

Key takeaways from the latest U.S. Bureau of Labor Statistics report1 include:

  • Jobs increased by 353,000 in January, nearly double the expectation of 185,000.2
  • Growth spanned industries, led by professional and business services with 74,000, as well as healthcare (70,000) and retail trade (45,000).
  • The unemployment rate held steady at 3.7%, lower than the estimate of 3.8%.
  • On a year-over-year basis, wages jumped 4.5%, well above the 4.1% forecast.

With earnings on the rise, six in 10 workers still believe their income isn’t keeping up with inflation and the cost of living, yet only 31% plan to ask for a raise this year, according to recent Empower research.

Another Empower study, focused on employees with a retirement plan, shows workers are worried about how macroeconomic factors impact their personal finances, with their top financial concerns including:

  • Inflation (90%)
  • Possibility of a recession (81%)
  • Rising interest rates and high prices (81%)
  • Healthcare costs (81%)
  • Market volatility (77%)

How jobs impact the economy

Some economists say the hot job market is powering a positive feedback loop: When workers have paychecks that beat out inflation, consumers can keep spending, in turn creating new jobs and more buying.

Indeed, consumer spending is a significant driver of the economy. In the fourth quarter of 2023, personal consumption expenditures racked up 68% of the nation’s Gross Domestic Product, or GDP, a core measure of the size of the U.S. economy.3

But the outlook isn’t all rosy: Other economists worry the strong January jobs report may prevent the Federal Reserve from slashing interest rates anytime soon. That’s because a tight labor market with competitive wages may prompt consumers to keep spending. Recent Empower research shows shoppers are staying active, with more than 2 in 5 (42%) of Americans shopping simply to treat themselves at least once a month, and 21% doing so at least once a week.

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1 U.S. Bureau of Labor Statistics, “Employment Situation Summary,” February 2024.

2 CNBC, “U.S. economy added 353,000 jobs in January, much better than expected,” February 2024.

3 FRED Economic Data, “Shares of gross domestic product: Personal consumption expenditures,” January 2024.


The Currency editors

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The CurrencyTM, a publication from Empower, covers the latest financial news and views shaping how we live, work, and play. We keep you current on ways to plan, save, and invest for life.

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