October Jobs Data Show Solid Employment Growth
RENEE MONTAGNE, HOST:
Here's an irony of the thumping President Obama's party took on Election Day - voters were disappointed with both the president and the country's direction. Yet on the day after the election, the president was able to paint a sunny picture.
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PRESIDENT BARACK OBAMA: This country's made real progress since the crisis six years ago. The fact is more Americans are working. Unemployment has come down. More Americans have health insurance. Manufacturing has grown.
MONTAGNE: By the numbers, the president was correct. This morning's federal jobs report showed unemployment is the lowest in years - 5.8 percent. NPR's John Ydstie reports, though, that there is some disappointment - wages continue to be sluggish.
JOHN YDSTIE, BYLINE: Job creation for October, which was 214,000, was slightly below expectations. But an upward revision during the previous month kept the job growth close to the average of 220,000 for the previous 12 months. That turns out to be the strongest stretch of job creation since before the Great Recession. The strong showing is good news for people looking for jobs. And lots of people streamed into the labor force in October, suggesting many workers now think they have a better chance of getting a job. But John Canally, an economist and senior vice president at LPL financial, says it's disappointing that the solid job growth is not being accompanied by solid wage growth.
JOHN CANALLY: You are starting to see scattered wage increases in certain areas of the country and in certain skilled positions, but largely across the country you're still seeing downward pressure on wages.
YDSTIE: Wages grew just a tenth of a percent last month. And over the past year, they've grown just 2 percent. That's half the normal pace of wage increases and just barely keeping up with inflation. Canally says that's affecting the mood and spending power of consumers and restraining growth.
CANALLY: It's a great explanation as to why consumer spending in this business cycle so far - you know, we're five-and-a-half years in - why it's been about half of what it is normally.
YDSTIE: That's meant the economy has grown more slowly than usual during this recovery. And the job market has taken longer to heal as well. Canally says the recent solid job growth numbers and the big fall in the unemployment rate, from 10 percent at its Recession peak to 5.8 percent now, are masking remaining problems in the labor market.
CANALLY: Things like the mix between full-time and part-time is still too skewed towards part-time employment. The median duration of unemployment is way too long, still. But I think that key stat would be the average hourly earnings.
YDSTIE: Canally says that's the most important measure for the Federal Reserve as it considers when it will be safe to take away the super-low interest rates that are supporting the economy now. John Ydstie, NPR News, Washington. Transcript provided by NPR, Copyright NPR.