U.S. Hits Longest Streak in 20 Years of 200,000 Added Jobs per Month…but Wages Remain Flat
By most measures, the economy is in far better shape than it was when President Barack Obama took office. In February, 295,000 jobs were added, the 12th month in a row that at least 200,000 jobs were added, the longest such period since 1994.
According to the Bureau of Labor Statistics, “Job gains occurred in food services and drinking places, professional and business services, construction, health care, and in transportation and warehousing.”
The unemployment rate, 5.5%, is the lowest since May 2008. The stock market is high and gas prices are relatively low. The outlier is wage growth, which has been stagnant.
Despite the drop in the unemployment rate, and the move by low-wage employers such as Walmart to increase base pay, earnings have increased just less than 2% in the past year.
Some of that flat wage growth can be blamed on the number of people who have left the workforce. The workforce participation rate fell to 62.8%, down 0.1%. Part of the reason for that number is that as baby boomers age, they tend to participate less in the job market.
Wages may increase as the labor market tightens, but some of that depends on whether the Fed continues its policy of low interest rates. Should it decide that inflation is a threat, it could tighten the money supply, sending unemployment up and keeping wages flat.
To Learn More:
U.S. Labor Market Flexes Muscles as February Payrolls Soar (by Lucia Mutikani, Reuters)
Job Growth Was Fantastic Last Month. So Why Aren’t Wages Rising More? (by Neil Irwin, New York Times)
62.8%: Labor Force Participation Has Hovered Near 37-Year-Low for 11 Months (by Ali Meyer, CNS News)
Employment Situation Summary (Bureau of Labor Statistics)
Over 50 Years, Private Job Growth Better under Democratic Presidents (by Noel Brinkerhoff and David Wallechinsky, AllGov)
Hourly Wages See Sharpest Drop Since at Least 1947; Bank Profits Hit Record High (by Noel Brinkerhoff, AllGov)
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