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Key developments: The latest employment establishment survey shows average hourly earnings grew just 3% year‑over‑year in September, marking the weakest increase since May 2021. While nominal wages ticked up, inflation remains well above 3%, meaning real wages are actually falling.
Why they matter: Modest wage growth limits disposable income gains for households already feeling pressure from declining real wages, as noted in the broader economic update. With real earnings shrinking, consumer spending could soften, threatening the recent out‑performance of personal consumption expenditures.
What to watch next: Analysts will monitor whether the Federal Reserve adjusts policy expectations as wage pressures ease, and whether upcoming employment reports show any rebound in real wage growth or a further slide that could dampen consumer demand. [[1]]