Dean Baker (see also Calculated Risk, Jared Bernstein):
Strong Employment Gains for Prime-Age Workers as Wage Growth Accelerates: The Labor Department reported the economy added 161,000 jobs in October. With modest upward revisions to the prior two months’ data, the average for the last three months is 176,000. The unemployment rate edged down to 4.9 percent, but the employment rate also edged down to 59.7 percent, as the household survey showed a small decline in both employment and labor force participation.
However the picture is much better for prime-age workers (ages 25–54). Their employment-to-population (EPOP) ratio rose 0.2 percentage points to 78.2 percent. This is the highest it has been in the recovery, although it is still 2.1 percentage points below the pre-recession peak and 3.7 percentage points below its 2000 peak.
It’s worth noting that the improvement in prime-age EPOPs occurred for both men and women. The EPOP for prime-age men is up by 4.6 percentage points from its trough in December of 2009. The EPOP for prime-age women is up by 2.9 percentage points from its recession trough in September of 2011, although women were much less hard hit by the downturn.
Using the 2000 peaks as the base of comparison, the EPOP for women is down by 3.3 percentage points while the EPOP for men is down by 4.5 percentage points. While the falloff has been larger for men than women, there have been sharp declines for both, indicating that the problem is the labor market, not the physical and/or psychological state of men.
Other data in the household survey were also positive. ....
There was little change in the duration measures...
The numbers of voluntary and involuntary part-time workers were little changed....
Interestingly, recent growth has not especially favored more educated workers. Over the last year, employment rates for people with just a high school degree are up by 0.5 percentage points, while those with some college have seen a rise of 0.7 percentage points. By contrast, the EPOP for workers with college degrees has fallen by 0.1 percentage points.
Most of the data on the establishment side survey should be seen as positive, in spite of the somewhat slower pace of job growth. Wage growth appears to have accelerated modestly. The average hourly wage over the last three months increased at a 2.9 percent annual rate compared with its average over the prior three months. Over the last year, the average hourly wage is up 2.8 percent.
Some of this wage growth does not indicate more rapid growth in compensation, but rather a shift from benefits (mostly health care) to wages. The employment cost index for the last year showed private sector wages rising 2.4 percent while benefits increased by just 1.8 percent.
More rapid wage growth is consistent with a story where workers are leaving low-paying jobs for better paying jobs. In this respect it is worth noting that lower paying industries were not sources of big job gains in October. ...
This jobs report provides solid evidence that the labor market is improving for most of the labor force. Workers are taking advantage of a tighter labor market to move into better paying jobs.
Posted by Mark Thoma on Friday, November 4, 2016 at 09:10 AM in Economics, Unemployment |