Jun 7, 2017

For workers, this economy could be as good as it gets

Despite falling unemployment, the 2017 economy appears to be leaving a growing number of workers behind.

Data: Bureau of Labor Statistics; Chart: Andrew Witherspoon / Axios

Take for instance the gap between official joblessness and a much broader rate that includes people who have stopped looking for a job but say they still want one, along with part-time workers who want full-time jobs. Today this broader jobless rate is 8.4%, almost double the official 4.3%. The last time the official rate was this low, in 2001, the broader rate was almost a point lower.

Why it matters: A greater share of Americans are cut off from the work force today than in prior periods of low official unemployment.

In a research note to clients this week, Jim O'Sullivan of High Frequency Economics predicted that the main jobless rate will fall below 4% by the end of next year, which would be the lowest since December 2000. But he also noted that, according to recent survey data, business owners report a harder time finding qualified candidates for their job openings. That means that broader unemployment could remain stubbornly high.

Why aren't wages rising faster? Salaries began to rise faster in recent months, according to government data, but the movement should be greater when considering how low unemployment is. Economists expect wage growth to accelerate as joblessness continues to fall. But even if this occurs, it will be cold comfort to chronically jobless and underemployed on the fringes of the labor market.

Rising delinquencies: The struggles of poorer Americans can also be seen in the rise in subprime auto loan delinquencies in recent months, which are now well above pre-recession norms.

Then there is the Fed: Markets expect the Federal Reserve to raise interest interests rates at its meeting next week, and economic history shows that when the Fed starts hiking rates, recessions often follow, which, if one occurs, will be another blow to workers.

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Wages for typical workers are rising at their fastest rate in a decade

Construction workers holding a rally in the Bronx. Photo: Erik McGregor/LightRocket via Getty Images

Wages for nonsupervisory employees — who make up 82% of the workforce — are rising at the fastest rate in more than a decade, the Wall Street Journal reports.

Why it matters: It indicates that the benefits of a tightening labor market and a time of historically low unemployment rates are finally being passed along to most workers.

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An unsettling future for millions of American jobs

Illustration: Aïda Amer/Axios

The U.S. economy is besting expectations for job growth, and the unemployment rate is at its lowest in several decades — but the other side of the story is that millions of jobs out there just aren't good enough.

Why it matters: Almost half of all American workers are stuck in low-wage jobs that often don't pay enough to support their lives, lack benefits and sit squarely inside the automation bullseye.

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U.S. economy adds 145,000 jobs in final report of 2019

Data: Bureau of Labor Statistics; Chart: Axios Visuals

The U.S. economy added 145,000 jobs in December, the government said on Friday, below economists’ expectations of 160,000. The unemployment rate held at 3.5% — a 50-year low — while wages grew 2.9% from a year earlier, the smallest gain since July 2018.

Why it matters: The U.S. job market held up in the final month of 2019, but heads into the election year with a slowing pace of job creation and wage growth.

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