PayScale, Inc. has released the Q2 2016 PayScale Index, which tracks quarterly and annual trends in compensation and also provides a U.S. national wage forecast for the coming quarter. In the second quarter of 2016, U.S. annual wage growth was largely positive with national quarterly wage growth of 0.5% and annual wage growth of 2.5%. Wage growth has been experiencing a slight uptick in recent quarters in the U.S. and growth for data-focused jobs has been particularly strong. The PayScale Index predicts overall US wage growth in Q3 may dip slightly, but is still anticipated to be up 1.6% from the previous year.

"Annual wage growth for IT jobs has actually been slightly below the national average in the first half of 2016," said Katie Bardaro, VP of Data Analytics and Lead Economist at PayScale. "However, as more organizations use increasing amounts of data, data-centric jobs are in high demand and appear to be driving wages up in the technology centers such as Seattle and San Francisco."

Key findings in the Q2 2016 PayScale Index

Tech centers experienced strong growth:

  • Metros with a high prevalence of STEM workers performed well this quarter, with both San Francisco and Seattle high on the list of metros experiencing the annual wage growth at 3.5% and 3.4%, respectively. Seattle also overtook Houston for the most wage growth since 2006 at 15.2% versus 14.4%.
  • Wage growth in data-focused positions such as data analyst, data scientist, data mining engineer and business intelligence analyst has been very strong over the past few quarters and is contributing to overall wage growth in these tech-focused cities. 

Wages for mining, oil and gas exploration continue to fall:

  • Annual wage growth in the mining, oil and gas exploration industry decreased 2.3% last quarter. However, as far as wage growth since 2006, this industry has experienced the highest wage growth of any industry tracked by the PayScale Index at 14.9%.
  • Even with wages in the mining industry falling, Houston still experienced quarterly wage growth of 1.1% and annual wage growth of 2.3%.

Highlights for U.S. metro wage growth include:

The top five U.S. metro areas experiencing the most annual wage growth were:

  • Riverside, CA (4.2%)
  • San Francisco, CA (3.5%)
  • Seattle, WA (3.4%)
  • San Diego, CA (3.1%)
  • Tampa, FL (2.9%)
  • The three U.S. metros experiencing the least growth in annual wages were:
  • St. Louis, MO (1.8%)
  • Philadelphia, PA (1.5%)
  • Baltimore, MD (1.3%)

Positive Canadian wage growth:

  • Similar to the U.S., most measures in Canada showed an uptick in wages where annual wage growth was 1.5% nationally. The exception was the oil city of Edmonton where annual wage growth was down 0.1%.
  • Wages still buy less today than in 2006:
  • Real wages are down 7.4% since 2006, reflecting a slight improvement over the past three years during which real wages reached a low of more than 8%.

PayScale's real wages are calculated by analyzing nominal wage growth and the average change in price of a fixed basket of goods and services.