Hiring picked up in June with 224,000 new jobs added to the US economy — a remarkable jump after several months of slowing job growth, according to the latest jobs report …
Hiring picked up in June with 224,000 new jobs added to the US economy — a remarkable jump after several months of slowing job growth, according to the latest jobs report from the Bureau of Labor Statistics.
That’s three times as many new jobs as the previous month, and nearly double the 140,000 new positions economists had expected. The sudden jump in job creation defies the panicked narrative on Wall Street that an economic downturn is right around the corner. This week, the economy broke the record for the longest period of economic growth in US history, and the latest jobs data shows no signs that it might slow down.
The super-low unemployment rate, for example, hardly budged in June to 3.7 percent. That’s still the lowest rate of unemployed Americans recorded since December 1969.
US Department of Labor/Bureau of Labor Statistics
Yet all this good news doesn’t mean much to middle- and working-class families: Workers only got an average hourly pay raise of 6 cents in June, even less than they got in May. Job security is the only benefit employees can count on these days.
Low unemployment and high job creation means that nearly every American who wants to work and is able to has snagged a job by now. And those who lose their jobs, or decide to leave, probably won’t have a hard time finding another position.
But millions of Americans are working part-time jobs when they would rather get full-time gigs, or at least work more hours. The number of people in that group has been mostly shrinking but still added up to 4.3 million workers in May.
Most of the new job hiring last month was for positions in business services and health care.
The average monthly job growth so far in 2019 is about 172,000, a notable drop from the 223,000 positions created monthly last year. The drop isn’t huge; it just suggests that the current labor shortage is making it hard for employers to fill all the open positions. There are far more jobs available right now than there are people looking for work.
Businesses are still being super stingy
Even though Americans are finding jobs pretty easily, they still aren’t seeing the so-called “economic boom” reflected in their pocketbooks.
June was another month with disappointing wage growth. With such a tight labor market and rising productivity, workers should expect much bigger pay raises than they’re getting.
Private sector workers (excluding farmworkers) got an average 6-cent hourly raise, adding up to an average hourly pay of $27.90. In the past 12 months, average hourly earnings have only increased by 3.1 percent, and that doesn’t even take inflation into account. That’s down from the 9-cent raise workers got in May.
The latest pay data suggests that workers and labor unions will continue to strike to force businesses to boost wages.
“Growth in wages clearly leveling out,” Indeed economist Martha Gimbel tweeted.
Slow income growth has been the weakest part of the US economy in its recovery from the Great Recession. Wages have barely kept up with the cost of living, even as the unemployment rate dropped and the economy expanded.
June’s 6-cent average hourly wage hike suggests more of the same, despite a surprising 10-cent jump back in February.
Over the past year, the cost of food and housing has gone up, so paychecks have had to stretch further. But because of a recent drop in the price of clothes and utilities, the annual inflation rate has fallen to 2 percent, compared to a high of 2.4 percent in 2018 (based on the Consumer Price Index).
When you take inflation into account, workers’ real wages only grew about 1.3 percent over the past year. This is worth emphasizing: During the longest economic expansion in US history, with record low unemployment, workers are only making 1.3 percent more than they did last year, after adjusting for inflation.
That’s even slower than wages were growing earlier this year, and it’s pitiful when you compare it to the sky-high payouts corporate CEOs are getting.
For example, CEOs got an average $500,000 pay bump in 2018, while the average US worker got an extra $1,000 — barely enough to outpace inflation.
Frustration over stagnant wages is also the major underlying factor behind widespread worker strikes across the country in places like California, Illinois, and Missouri (workers at Vox also recently staged a one-day walkout amid ongoing contract negotiations). In April, 31,000 supermarket employees went on strike in the Northeast to reverse proposed pay cuts and rising insurance premiums. The Stop & Shop strike in mid-April was the largest private sector work stoppage in years. After eight days with empty supermarkets, the company agreed to scrap its plan.
Some economists are confident that wages will start to pick up if this trend continues. “[T]he sharp increase in the number of working days lost to strikes over pay and benefits over the past year suggests that employees increasingly recognize that the balance of power has shifted in their favor,” Ian Shepherdson, chief economist for the research firm Pantheon Macroeconomics, wrote earlier this year in an analysis.
The widespread labor unrest underscores how the Republican tax cuts did little to help working-class families, despite all the promises from congressional Republicans.
In response, voters in some states have forced businesses to give low-paid employees a raise.
In November’s midterm elections, voters in Missouri and Arkansas overwhelmingly approved ballot measures that will raise the minimum wage for nearly 1 million workers across both states. And as a result of the new laws, more than 5 million low-wage workers in 19 states got pay raises on January 1.
Those laws have helped boost wages so far in 2019, but not enough.