The only jobs giving out pay raises right now are in construction, mining, and public administration, the New York Fed finds

The New York Federal Reserve reports that pay raises are concentrated almost exclusively in construction, mining, and public administration sectors, signaling a highly uneven labor market recovery. This finding suggests wage growth remains constrained across most industries despite persistent inflation, with implications for consumer spending and monetary policy effectiveness.

The New York Fed's labor market assessment reveals a fragmented wage environment that diverges sharply from the narrative of broad-based wage growth. Rather than experiencing industry-wide salary increases, workers across most sectors face stagnant compensation despite elevated living costs. This bifurcation reflects structural labor market dynamics where only specific industries facing acute skill shortages or government spending initiatives can justify meaningful raises. Construction and mining benefit from infrastructure investment and commodity demand cycles, while public administration gains from budget allocations, creating isolated pockets of wage pressure. For the broader economy, this pattern indicates that inflation expectations may moderate as most workers lack bargaining power to secure raises, potentially easing pressure on the Federal Reserve to maintain restrictive interest rates. However, this also suggests uneven consumer purchasing power, with implications for retail and discretionary spending patterns. The concentration of raises in cyclical and commodity-dependent sectors introduces vulnerability—construction activity can contract quickly, and mining depends on commodity price cycles. For investors and policy makers, this data underscores that headline wage figures mask significant distributional challenges. The sustainability of current inflation levels depends partly on whether wage-price dynamics remain contained in non-raising sectors. This environment could support asset classes benefiting from lower interest rate expectations while potentially pressuring equities dependent on broad consumer demand. Monitoring whether wage pressure spreads beyond these three sectors becomes critical for assessing inflation trajectory and central bank policy direction over coming quarters.

• →Pay raises are concentrated in construction, mining, and public administration, not broadly across the labor market.
• →Most workers face wage stagnation despite persistent inflation, limiting consumer purchasing power.
• →Uneven wage growth suggests contained inflation pressure in non-raising sectors may support lower rate expectations.
• →Construction and mining wage dynamics remain vulnerable to commodity cycles and economic cyclicality.
• →Labor market fragmentation could pressure discretionary spending while supporting sectors benefiting from lower rates.