March 4, 2026
The Upjohn Institute New Hires Quality Index shows that the inflation-adjusted hourly earnings power of people starting new jobs dipped slightly in January, falling to $22.24. This is near, but still below, the record highs of July 2023. Hiring volume climbed for the second month, and is up 3.4 percent from this time last year. However, it is still down 2.7 percent from the outbreak of the COVID-19 pandemic. Adjusting for population change, hiring rates are above last year’s mark, but are down even further from the pre-COVID baseline.
This month, author Brad Hershbein explores the differences between the service and goods sectors of the economy and how each has responded to changes in tariff policy.
After falling between early 2023 and late 2024, the wage index for goods-sector new hires has climbed 2.7 percent since April 2025 – when the first major round of new tariffs arrived – to near record highs. However, this rise in the wage index has been paired with declines in the volume of new hiring. While the general decline in goods sector hiring has been ongoing, the pause in that decline that held for 2024 resumed in early 2025.
This suggests that while newly hired workers in the goods sector are earning more than before, there are fewer workers being hired in that sector overall as low-earning goods sector jobs disappear.
The service sector is driving all the new hiring seen in the economy, with that sector’s hiring volume spiking and new workers enjoying higher earning power. This dichotomy between sectors holds when looking at hiring rates rather than absolute numbers: The number of goods-sector hires per incumbent worker began to fall in early 2025 even as service-sector hires per incumbent worker began to climb.
Interactive charts and full data are available at upjohn.org/nhqi.