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The July jobs report showed slower job growth and a slight increase in the unemployment rate. This helped keep wage growth in check. This slower wage increase played a role in the modest rise of the Consumer Price Index (CPI) for July, which increased by 0.2%. The relationship between jobs, wages and prices is important because when wages rise too fast, it can drive up prices, leading to more inflation.
Key Takeaways from the July CPI
Stable Energy Prices
Energy prices didn’t change much in July, following previous declines. This is good news for industries that depend heavily on energy, like transportation, because stable prices mean less pressure to increase wages.
Shelter Costs Remain High
Housing costs went up by 0.4% in July, continuing to be a big part of inflation. This rise in rent and housing expenses means companies might need to offer more remote work options or better relocation packages to attract talent.
Food Prices and Wage Dynamics
Food prices grew slightly, up by 0.2%. While grocery prices stayed fairly stable, restaurant prices remain higher, which might keep pressure on wages in the food service industry.
Core Inflation Eases
Core CPI, which excludes food and energy, also increased by 0.2%, marking its slowest year-over-year rise since early 2021. This suggests that inflation is calming down, which could lead to more predictable hiring and pay planning.
Strategic Adjustments for Recruiters
- Offer Competitive Pay: As housing and dining costs stay high, make sure your salary offers reflect these expenses, especially in cities with high living costs.
- Watch Sector Trends: Keep an eye on energy prices and their potential impact on wages in industries that rely on energy. Stability here could be a good sign, but it’s still something to monitor.
- Highlight Stability: When recruiting, focus on the stability and benefits your organization offers, as candidates are looking for secure job opportunities in uncertain times.
The July jobs report’s slower job growth helped keep inflation in check, as reflected in the CPI. Understanding these connections can help you make smarter decisions in talent acquisition and stay ahead in a changing economy.
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