Upward pressure on wage growth may be on horizon
WASHINGTON (Reuters) — U.S. employers are finding it increasingly difficult to find skilled workers, according to a survey published on Monday, suggesting upward pressure on wage growth down the road.
The National Association for Business Economics' latest business conditions survey found that 35 per cent of the 112 economists who participated reported their firms had seen shortages of skilled labour during the quarter ending in July.
That compared with only 25 per cent in the April survey and marked a sharp pick-up from 22 per cent during the July quarter last year.
"The panel reports markedly increased shortages in the July survey, especially of skilled labour," said survey Chairman Jim Diffley, who is also a senior director at IHS Economics.
The NABE survey is the latest to suggest a tightening labour market. Early in July, the National Federation of Independent Business said that 44 per cent of small businesses looking to hire that month reported few or no qualified applicants for positions they were trying to fill.
Although job growth has accelerated and the unemployment rate has dropped to seven-year lows, that has not been accompanied by strong wage growth.
The NABE survey found the share of companies anticipating wage increases in the next three months grew to 49 per cent from 46 per cent in the April poll and 35 per cent a year ago.
"As an economist watching the economy, we're somewhat surprised that wages pressures have been so muted to this point," Diffley told Reuters. "We do expect an acceleration and in fact think it necessary to continue the recovery."
The share of those reporting actual wage increases during the past three months remained at 42 per cent, little changed from 43 per cent a year ago but slightly down from 45 per cent in April.
The economists surveyed represented a broad spectrum of businesses, including goods-producing, transportation, finance and services industries. Forty-seven percent of the firms employ more than 1,000 people.
