The Employment Situation for November 2014

I would be remiss if I didn’t mention the good employment report the Bureau of Labor Statistics released yesterday:

Total nonfarm payroll employment increased by 321,000 in November, and the unemployment rate was unchanged at 5.8 percent, the U.S. Bureau of Labor Statistics reported today. Job gains were widespread, led by growth in professional and business services, retail
trade, health care, and manufacturing.

There’s a substantial list of reasons that this was a good report. The baseline number of jobs was high, especially by present standards. The median hourly wage went up. The improvement was spread across the economy rather than being concentrated in just a sector or two. And, believe it or not, that the unemployment rate didn’t go down as the number of jobs grew is actually a good sign since it suggests that more people are coming back into the job market. Time will tell.

The editors of the New York Times are largely on the same page:

Yet, it is still too soon to say with any confidence that the labor market has found its footing. Some of November’s unexpected strength in job creation could turn out to be the result of seasonal factors. And even if the growth numbers hold up, problems persist in job quality, as measured by pay and working conditions.

For example, the 9-cent increase in average hourly wages in November, to $24.66, while welcome, is not enough to make up for prolonged wage stagnation. Measured year to year, hourly wage growth hasn’t accelerated since 2010; it remains stuck at around 2 percent, which is barely ahead of inflation. When hourly wages are flat, the only way to earn more is to work more.

What would have made it better? If it had been 20th month of that kind of growth which is about what it would take to bring all the people who’ve left the job market since the last peak back to work. I think I’ll stop there before I harsh the mellow.

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