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Expand chart
Data: Bureau of Labor Statistics; Chart: Axios Visuals

The hottest months on record have been the backdrop for what, on the surface, has seemed to be an equally red-hot U.S. labor market, with the lowest joblessness in a half century, rising wages, and bettering prospects for the least advantaged people.

Quick take: But, at odds with classic textbook lessons, experts now cite evidence that the economy may actually only be warm, with millions of people still wishing to get hired, to turn part-time or gig work into full-time employment, and to earn more money.

What's happening: In its latest report, the U.S. Bureau of Labor Statistics said the economy produced a great surplus of work above and beyond the number required to absorb new job entrants. Just 80,000-100,000 jobs are needed to soak up fresh graduates and other new entrants to the work force each month, and the economy produced 164,000 in July.

  • That left the July jobless rate at 3.7%, the lowest since 1969. Wages rose by 3.2%, double the 1.6% inflation rate.
  • Moreover, unemployment for black men remained at a record low of 5.8% and for black teens at 17.7%.

All kosher, right? Not if one is guided by history:

  • If you smooth out for monthly gyrations and take a 3-month average, the number of jobs increased by 140,000, well below the 211,000 during the same months in 2018, and the least in two years.

And wages are not rising as they should if you believe in the law of supply and demand, along with historical trends, which say they should be increasing at a fast clip since employers should be robustly competing to grab workers.

  • Instead, the year-over-year real average annual wage increase of 1.6% is far below the rates of 4% and more marked month after month just prior to the Great Recession.
  • Nominally, writes Dean Baker, senior economist at the Center for Economic and Policy Research, manufacturing wages rose an average of 2.5% over the year. But when you factor in lower weekly hours, the increase was just 1%, below inflation.

What economists now suspect: We are not in a tight jobs market.

In a recent piece, the WSJ's David Harrison cites work by David Bell, an economist at the University of Stirling, and Dartmouth's David Blanchflower, who blame the sluggish wages on an outgrowth of people working part-time.

  • This critical mass of people who actually want full-time work has created an in-built flaccidity in the job market, and been "the main influence on wages in the years since the Great Recession," Bell and Blanchflower write in a 2018 paper.

Thought bubble from Axios markets reporter Courtenay Brown: "There's sort of this chicken-or-egg dynamic here. Wages aren't growing because workers aren't coming off the sidelines, so there's not enough competition for talent for companies to raise pay. Meanwhile, workers may not be coming off the sidelines because wages aren't spectacular enough to make them jump back in."

Go deeper

Updated 34 mins ago - Politics & Policy

In photos: Tears, hugs, cheers as U.S. reacts to Chauvin guilty verdict

People react after the verdict in the Derek Chauvin trial in Minneapolis, Minnesota. Photo: Scott Olson/Getty Images

People across the U.S. rallied into the night Tuesday, cheering, hugging and crying tears of relief after a jury found former Minneapolis police officer Derek Chauvin guilty in the murder of George Floyd.

Driving the news: After Chauvin was found guilty of second-degree murder, third-degree murder and second-degree manslaughter, Floyd family lawyer Ben Crump tweeted, "GUILTY! Painfully earned justice has finally arrived for George Floyd’s family. ... Justice for Black America is justice for all of America!"

Columbus police officer fatally shoots Black teenage girl

Photo: Eric Lee/Bloomberg via Getty Images

The Ohio Bureau of Criminal Investigation is investigating the fatal police shooting of a Black teenage girl in Columbus on Tuesday afternoon.

Of note: The shooting of the girl, identified by family members as Ma'Khia Bryant, 16, occurred just before the verdict was announced in the Minneapolis murder trial of former officer Derek Chauvin, and as the nation grapples with police reform.

European Super League faces collapse after English soccer teams quit

Fans of Chelsea Football Club protest the European Super League outside Stamford Bridge soccer stadium in London, England. Photo: Rob Pinney/Getty Images

The European Super League announced in a statement Tuesday night it's "proposing a new competition" and considering the next steps after all six English soccer clubs pulled out of the breakaway tournament.

Why it matters: The announcement that 12 of the richest clubs in England, Spain and Italy would start a new league was met with backlash from fans, soccer stars and politicians. The British government had threatened to pass legislation to stop it from going ahead.