Accommodation and foodservices wages and salaries rose 1.5% in Q2, or 3.6% year-over-year

Dr. Chad Moutray

Private-sector wages and salaries in the accommodation and foodservices sector rose 1.6% in the Q2 2024 using non-seasonally adjusted data, up from 1.0% in Q1 2024 and the strongest quarterly pace since Q1 2023. Indeed, after showing signs of deceleration throughout much of 2023, the cost of wages and salaries for the sector have picked up so far in 2024.

With that said, there has been a very significant moderation in wages and salaries in the accommodation and foodservices sector since the heights of two years ago. Over the past 12 months, private-sector wages and salaries in the sector have risen 3.6%, up from 3.3% year-over-year in Q1 2024. While that represents a solid increase, it is down notably from the all-time high for this series, which was 9.4% year-over-year growth in Q1 2022. Indeed, the cost of wages and salaries have normalized to the average year-over-year growth rates seen in the pre-pandemic years of 2018 and 2019, which was 3.6%.

Note that one advantage of the Employment Cost Index data is that, unlike other labor market figures, it controls for composition of occupations within an industry. As such, it is said to be a better reflection of wage and salary costs over time within an industry, at least by some, including the Federal Reserve.