Gaming the odds of a pay raise in 2025? Flip a coin.

It’s a simple, but common, question for anyone with a job. Will I get a raise this year? 

Last week, we talked about the pandemic’s long-lasting effect on pay growth. Today, I’ll compare the current state of the labor market to where it was during the first half of 2019, the year before the pandemic began and the last year of the U.S. economy’s 10-year expansion. 

Hiring was stronger and unemployment was lower, but labor force participation was higher in the first six months of 2019 than the first half of 2025. The disconnect between the worker supply and demand in 2019 caused pay to fall during the first half of that year.  

For the first half of 2025, there’s been almost no gap between employer demand for workers and labor force participation, which measures the supply of people who want to and are able to work. With the labor market at a sort of equilibrium, the odds of a big pay bump this year might come down to a coin flip.  

Slowing demand from employers 

In June 2019, the unemployment rate was near historic lows, at 3.6 percent, according to the Bureau of Labor Statistics. Job gains in the first half of the year averaged 171,000 per month.  

In June 2025, the unemployment rate was 4.1 percent, still low, but higher than it was six years ago. And job gains for the first half of 2025 have averaged only 130,000 per month, 24 percent fewer than we saw during the same period in 2019.   

For another read on employer demand for workers, we can look at the latest available data on job openings. The BLS reported some 500,000 more openings in May 2025 than in May 2019, which suggests demand for new hires is stronger.   

But the hiring rate—the speed at which employers fill new positions—fell to 3.4 percent in May 2025 from 3.8 percent in May 2019. Even though there are nearly 7 percent more job openings now than there were in 2019, employers are showing less urgency to fill them. 

A tighter supply of workers 

Demand for workers is just one part of the labor market story. The supply of workers also factors into the pace of pay growth.  

Worker supply is weaker now than it was. The labor force participation rate in June was 62.3 percent, down from 63 percent in June 2019. 

And even as a smaller share of the population is working or looking for work in 2025, people who do have jobs are working fewer hours. The typical worker is putting in an hour less every week than they were a year ago, for a median of 38.1 hours in June 2025 compared to 39.7 hours in June 2019, ADP payroll data shows.  

Pay hangs in the balance 

The labor-market supply and demand inputs we’ve just examined help determine the rate of pay growth. And the starting pay of new hires is a great indicator to watch for folks wondering about the likelihood of a pay increase this year.  

In the first six months of 2019, new hires lost ground as average hourly pay fell from $14.80 in January to $14.00 in June that year, according to ADP payroll data.  

This year, average hourly pay for new hires has been stuck at $18.00 for 12 months.  By this measure, labor force supply and demand are in balance.  

My take 

While demand for workers is softer now than it was before the pandemic, the supply of workers also is tighter. A smaller share of the population is working or looking for work, and people who are employed are putting in fewer hours. New-hire wages haven’t budged in a year.  

In this kind of labor market, the odds of anyone getting a pay raise are dead even.  

The week ahead 

Tuesday: After digesting the latest U.S. tariff policy developments, the market today will turn its attention to June’s inflation data. Inflation has been slowing steadily over the past few months, but we might see a change with today’s Consumer Price Index from the Bureau of Labor Statistics. Economists expect the annualized pace of inflation to pick up in the second half of this year.  

Wednesday: While consumer inflation typically gets the limelight, the wholesale prices that producers pay can be an important signal of what consumers might face in the future. For that reason, the BLS Producer Price Index will be on my radar today. 

Thursday: If you’re wondering how well the economy is doing relative to last year, watch today’s retail spending report from the Census Bureau. A June rebound from May’s weaker-than-expected levels would be a welcomed signal that consumer health remains strong.   

Friday: Housing starts fell to a five-year low in May, with construction of single-family houses down 7.3 percent year over year and volatile apartment construction down 29.7 percent. The slow pace of construction is part of a relatively gloomy picture for the housing market, which is suffering from elevated interest rates, affordability challenges, and high construction costs. Census will deliver June data on Friday.