The latest jobs numbers from the US Department of Labor, released on Friday, show that the US economy continues to create jobs at a robust pace despite historically low levels of unemployment. According to the April report from the Bureau of Labor Statistics, 263,000 jobs were created last month, overshooting analysts’ predictions in the range of 185,000-190,000. The unemployment rate fell to 3.6 percent, a level not seen in the US since December 1969.
Wages also rose, albeit more modestly than economists would expect to see in such a tight labor market: Average hourly earnings were up 0.2 percent month-to-month for a 3.2 percent increase over the last 12 months. While this was nearly the best year-over-year growth figure since the end of the Great Recession in 2009, it doesn’t make up for years of stagnation, while inflation wiped out a significant portion of those gains, Vox highlighted in its coverage of the jobs report:
The latest pay data suggests that workers and labor unions will continue to strike to force businesses to boost wages. Slow income growth has been the weakest part of the US economy in its recovery from the Great Recession. Wages have barely kept up with the cost of living, even as the unemployment rate dropped and the economy expanded. April’s 6-cent average hourly wage hike suggests more of the same, despite a surprising 10-cent jump in February.
Over the past year, the cost of food and housing has gone up, so paychecks have had to stretch further. But because of recent falling gas prices, the annual inflation rate has fallen to 1.9 percent, compared to a high of 2.4 percent in 2018 (based on the Consumer Price Index). So when you take inflation into account, workers’ real wages only grew about 1.3 percent within the past year.
There are also reasons to hesitate before celebrating the decline in the unemployment rate, the New York Times pointed out, noting that “the factors behind it aren’t as hopeful as the headline number itself”: