Atlanta Fed Wage Growth Tracker (1st Quartile)

The Atlanta Fed Wage Growth Tracker measures the median year-over-year pay increase for a matched sample of U.S. workers — the same worker in two consecutive years, not two different workers compared at a point in time. For the bottom quartile of earners, that figure is now 3.6%, roughly half the reference reading from October 2022. Bottom-quartile wage growth has lost much of its momentum in three years.

At 3.6%, the bottom-quartile worker's raise is roughly in line with current consumer inflation — which means the real raise, after inflation, is close to zero. For households in this quartile, that matters more than it does higher up the income distribution, because bottom-quartile earners spend a larger share of income on necessities whose prices have risen faster than the headline CPI — groceries, rent, auto insurance, health care.

The slowdown coincides with the plunge in JOLTS Quits Rate to the low end of its post-2015 range. The 2021-2022 wage surge for low earners was driven by workers switching jobs for raises. When workers stop quitting, the wage pressure that a tight labor market produces disappears, and employer pricing power over wages returns.

American Default tracks this series because low-wage workers are the most exposed to the downstream distress chain. The Buffer shows personal savings near historic lows. Falling Behind shows rising delinquency on consumer credit. Wage growth that fails to outpace the cost of essentials is where that chain begins.