This morning’s jobs report from the Labor Department beat economists’ predictions, showing the addition of 209,000 jobs last month.
Prior to the release of the report, economists polled by Reuters forecast a tally of 183,000 additional jobs to public and private, non-farm payrolls. The unemployment rate declined slightly to 4.3 percent, returning to a 16-year low.
Recent research suggests that employment levels have recovered from the Great Recession.
Per The Washington Post:
July’s additions also signify a notable turning point for the U.S. economy: After accounting for shifts in population, the level of employment has returned to what it was at in November 2007, before the recession decimated the job market, according to new research by the Brooking Institution’s Hamilton project.
“It does not mean there’s no slack in the economy, [or] that we’re at full employment. But it does mean the job losses from the great recession are behind us,” said Diane Whitmore Schanzenbach, one of the report’s authors.
Where Jobs Are Growing
Three industries added the most jobs last month: food services and drinking places (+53,000 jobs), professional and business services (+49,000 jobs), and healthcare (+39,000 jobs). Mining was essentially flat (+1,000 jobs).
Other industries were largely unchanged for the month, including construction, manufacturing, retail trade, wholesale trade, transportation and warehousing, financial activities, information, and government.
Why Aren’t Wages Growing Faster?
Average hourly earnings for private workers grew 9 cents to $26.36. According to The PayScale Index, which tracks the change in wages for employed U.S. workers, wages increased 2.4 percent from Q2 2016 to Q2 2017.
However, the buying power of workers’ paychecks is 7.5 percent less than it was in 2006, as the price of goods grows faster than wages. And given the low unemployment rate, wages should be growing faster than they are.
One issue may be that workers aren’t changing jobs.
“Labor market turnover, an important driver of wage growth, has recently flattened, even as the unemployment rate has continued to fall,” said Lewis Alexander, Chief U.S. Economist at Nomura, in a preview reported by Business Insider.
In addition, wages for low-paying jobs are rising faster than those for high-paying ones.
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