Unemployment fell to 50-year low in 2019 but wages stagnated
Friday's jobs report missed expectations, but still delivered solid numbers, showing the U.S. economy added well over 100,000 jobs and the unemployment rate remained near a 50-year low.
The big picture: BLS reported that the number of people who were employed part time but would rather be full-time employees declined by 507,000 over the year.
- The number of people who wanted to find a job and had looked but couldn't and had given up, fell by 310,000 in 2019.
- The number of discouraged workers fell by 98,000.
- The U6 unemployment rate, which includes these categories of workers, fell to 6.7% in December, a new cycle low and the lowest in at least a quarter century.
- Wages for production and nonsupervisory workers rose 3% in December
The other side: The wage increases for production and nonsupervisory workers had hit a decade high of 3.6% in October, showing a glaring deceleration to December.
- Overall, wages grew 2.9%, which was the lowest level in a year and a half and well below the 2018 average of 3.3%.
- “It’s easier to get a job than a raise in this economy,” Diane Swonk, chief economist at Grant Thornton, told the New York Times.
Between the lines: The average work week fell to 34.3 hours per week — indicating a lack of demand for labor at what should be a high-demand time of year.
- DRW Trading rate strategist Lou Brien also points out that the last time the unemployment rate was this low, in 1969, "the annual wage growth for the production and non-supervisory workers was above six percent, more than double the current level."
- "To say the least, the current level of wages does not suggest stiff competition for workers."