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Tight labor market pushes wages to new high

• A tight labor market in St. Louis has caused average hourly wages to exceed $27 per hour, the highest level on record. The 9.1 percent increase from this time last year is the largest annual gain in all available data. While unemployment has been falling for several years in St. Louis, the labor market has grown at a much slower pace. Since 2013, the labor force has expanded by 10,000 people. During the same period, employment grew almost seven times faster (66,000). This has kept unemployment below 4.0 percent for six months, the longest streak since the dot com era. These conditions are pushing employers to get more competitive when hiring new employees, in turn raising wages. 

• The construction industry in particular is having a hard time filling positions. The recession 10 years ago drove people away from the industry, and it is still trying to recover. In the most recent Federal Reserve Beige Book, contacts in St. louis reported labor shortages in construction, technology, and manufacturing. 

Source: BLS

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