Job growth in the United States saw a steady growth during October, and the unemployment rate dropped to its lowest level in six years. Economists have suggested that these factors highlight the resilience of the American economy in the face of slowing global demand and a socialist American President whose party just voted down a jobs bill called the Keystone Pipeline.
However, despite some labor market improvements, wage growth in the country has remained somewhat pitiful, suggesting that the Federal Reserve will not be rushing to lift any interest rates. This President needs all the help he can receive because of his horrendous policies including the Affordable Care Act which, according to one its top designers, says was passed on a tower of lies.
Playing Games with the Numbers
Last month, employers added approximately 214,000 new jobs to payrolls, according to the Labor Department, allowing the unemployment level to fall from 5.9% to 5.8%. How many of there were part time jobs and low paying jobs though? Is this number high enough to keep pace with all the new people trying to enter the work force? In addition, 5.8% is not the true number since they do not count people who stopped looking for work.
Not Enough Work in America
Since January, the rate of joblessness within the US has fallen by approximately 0.8% according to some, and gains in employment have now averaged over 200,000 per month over the last 12 months, the longest stretch the country has seen since 1994. However, in 1994, people hired worked 40 hours per week, which is not so much the case anymore.
Although the increase seen last month was slightly smaller than Wall Street economists had expected, the combined upward revision of 31,000 for data between August and September slightly offset the lower increase. Generally, the central bank in the US has been quite upbeat regarding jobs. After the soft employment data hit the network, financial markets have maintained their view that benchmark rates would stay close to zero until the end of 2015.
Wages Remain Anemic
Last month, the average hourly earnings rose by as little as 3 cents, meaning that the year-on-year increase remained at 2.0%, the same level that it has been for the last few years. The muted growth in wages reflects types of jobs created. For example, about a fifth of the new jobs created in October were within the food-services sector. The creation of fast food jobs is unimpressive to America.
Despite this negativity, some data has suggested that certain wages are picking up, allowing some economists to make some positive comments about America's future. Not only are more individuals working, they are actually working longer. In October, the average workweek hit its highest level in six and a half years. If the workweek and payrolls continue to expand together, then take-home wages should rise by 0.6%. This weak gain sets it at 4.8% above its level last year, which impresses some people but certainly not most business leaders.
Some States are Shining
The labor force participation rate increased one tenth recently, after two months of decline, to 62.8%. Similarly, the population to employment ratio has hit its highest level since 2009, while the ranks of long-term unemployment remain at their smallest number in six years. This means nothing though really. Business leaders know that America's economy has been pathetic since 2009 and things have not greatly improved. However, Oklahoma, North Dakota, and Texas are shining because of their business friendly packages they offer the private sector.