The U.S. has the very picture of a squeaky-tight jobs market, according to government figures released today: Unemployment at a 17-year low — at 4.1%, a top-line jobless figure just a tick away from the classic, 4% definition of full employment; seven straight years of jobs growth; and longer job searches — those lasting 15 weeks or longer — now only 1.5% of the work force, down from 2% a year ago.
Yet wage growth — one of the key underlying factors in last year's political earthquake with the election of Donald Trump — worsened last month (see chart). According to the law of supply and demand, employers should be sharply bidding up wages in order to capture increasingly scarce workers. But they aren't — and in fact, by the numbers, you might say they defiantly aren't. In October, they raised wages just a tad over inflation, at 2.4%, a plunge from September's already-miserly rate of 2.8%.