The November Bureau of Labor Services jobs report was relatively good news – a healthy 321,000 new jobs, leaving unemployment unchanged at 5.8%. The BLS also added 44,000 jobs in an adjustment for the prior two months. The Commerce Department reports that the economy grew at over 4 % over the last six months.
The BLS and other reports provide the first signs that the rewards of growth have finally begun to reach workers. The November rise in hourly wages exceeded expectations – 0.4% and recent report shows workers are more willing to quit jobs, a sign of growing confidence in the job market.
Falling gas prices will leave a little more money in family pocketbook – an estimated $600 for the typical family in the course of a year if they stay low. The early returns will surely be spent over the holidays giving an additional boost to the economy.
The economy now has more than made up for the jobs lost in the Great Recession, but not for the growth of the labor force. The civilian labor force participation rate remained unchanged at a low 62.8% in November, still lower than a year ago. (And by comparison, 66% in 2005) The employment – population ratio also was unchanged at 59.7 (63% in 2007). Over 18 million people remain in need of full-time work.
The economy still faces severe headwinds: Europe is headed back into recession. China is slowing dramatically. The US remains a virtual island of growth in a world shackled by austerity.
The report will embolden those pressuring the Federal Reserve to raise interest rates to avoid inflation. But price increases still are below the Fed’s target; the fall in energy is likely to slow them further. Employment is still not at the level where workers begin to share in the profits and productivity they are helping to produce. The Fed should hold off removing the punch bowl until working families have been invited to the party. And the Congress sensibly could help put people to work by making long overdue investments in rebuilding America. Raising the minimum wage, guaranteeing paid sick days and vacation days would also help spread the rewards of growth more widely. Don’t hold your breath for that.