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Friday, February 05, 2016

'Job Growth Slows in January, Unemployment Falls to 4.9 Percent'

Dean Baker:

Job Growth Slows in January, Unemployment Falls to 4.9 Percent, by Dean Baker: The Labor Department reported the economy added 151,000 jobs in January, in line with some economists' expectations. There were largely offsetting revisions to the prior two months data leaving the average change over the last three months at 231,000. The household survey showed a jump in employment that both lowered the unemployment rate to 4.9 percent and also raised the employment-to-population ratio (EPOP) to 59.6 percent. This is the highest EPOP of the recovery, but it is still more than 3 percentage points below the pre-recession level. ...

There was a large 12 cent jump in the average hourly wage in January, but this followed a month in which there was no reported rise at all. Over the last three months the wage has risen at a 2.5 percent annual rate compared to the prior three months, the same as its pace over the last year. There is little basis for the belief that wage growth is accelerating. The Employment Cost Index for the fourth quarter showed no uptick at all in the pace of compensation growth, with wage growth in the private sector actually slowing slightly. ...

The overall picture in this report is mixed. The sharp slowing in job growth was to be expected, given the slow growth reported in the economy. The labor market is still not tight enough to produce healthy wage growth. With many downside risks to growth, 2016 may not be a good year for workers.

    Posted by on Friday, February 5, 2016 at 07:47 AM in Economics, Unemployment | Permalink  Comments (22)


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