Prior to this morning’s jobs report from the Labor Department, economists predicted the addition of 198,000 jobs to non-farm payrolls. The monthly Employment Situation Summary instead showed gains of 155,000 jobs. Unemployment held steady at 3.7 percent.
The New York Times noted that monthly job gains still averaged more than 200,000 per month for the year.
“It’s obviously an economy that is well in expansion mode but that is coming off the boil after a strong second and third quarter,” said David Donabedian, chief investment officer of CIBC Private Wealth Management, speaking with The Times. “So the state of the job market is good. It’s just that the pace of job creation is slowing a little bit.”
These Industries Added Jobs Last Month
Job gains were concentrated in:
- Health care (+32,000 jobs)
- Business and professional services (+32,000 jobs)
- Manufacturing (+27,000 jobs)
- Transportation and warehousing (+25,000 jobs)
Retail trade showed a net gain of 18,000 jobs last month, but shed jobs in clothing and clothing accessories stores (-14,000 jobs), electronics and appliance stores (-11,000 jobs) and sporting goods, hobby and book stores (-11,000 jobs).
Other industries showed little growth for the month, including construction, wholesale trade, leisure and hospitality, mining, information, government and financial activities.
Wages Continue to Grow, But Is It Enough?
Despite a small decline in the average workweek for private-sector employees, average hourly earnings grew 6 cents to $27.35. Average hourly earnings have increased 3.1 percent over the course of the year.
However, the PayScale Index, which tracks the change in wages of employed U.S. workers, shows that real wages have declined over the past decade or so. As of Q3 2018, the buying power of workers’ pay was 9.5 percent lower than in 2006.
“Rising prices have erased U.S. workers’ meager wage gains, the latest sign strong economic growth has not translated into greater prosperity for the middle and working classes,” wrote Heather Long at The Washington Post’s Wonkblog.
In addition to rising inflation, workers must contend with higher prices for gas, housing and health care, among other factors, Long noted.
Might wages grow enough to make up for these costs? It remains to be seen. However, economists have noted that as unions decline and employers consolidate, workers may have less bargaining power … even in a tight labor market.
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