New jobs report shows that the economy is steady but wages are lagging

Employers added 155,000 jobs to the US economy in November — far fewer than the 198,000 new positions economists had expected, according to the latest jobs report from the Bureau of Labor Statistics. The unemployment rate held steady at 3.7 percent.

Both figures are a sign that the US economy is strong and continues to expand, even with weaker job growth. It means that most Americans don’t have to worry much about finding a job. The problem that remains, however, is that US workers haven’t seen their paychecks get any bigger.

In November, private sector workers (excluding farmworkers) got an average 6-cent hourly raise, adding up to an average hourly pay of $27.35. That was lower than economists expected, and reflects the same slow wage growth that has plagued the economy in recent years. In the past 12 months, average hourly earnings have only increased 81 cents, or 3.1 percent, and that doesn’t even take inflation into account.

The jobs report does point to a steadily growing economy, with the most new jobs created in health care, manufacturing, and construction. But to put that in perspective, job growth has slowed a bit: For the past 12 months, the economy has added about 209,000 new jobs each month. November’s 155,000 new jobs is still good, but it’s one of the weakest months so far this year.

Sluggish income growth is another persistent problem in a US economy that is otherwise doing quite well. Despite President Trump’s trade tariffs, corporate profits have soared, and the economy is growing faster than it has in more than a decade. But wages are barely keeping up with inflation.

Wages rose about 2.9 percent from September 2017 to September 2018, according to the Labor Department. That’s the biggest increase since 2008, and yet that’s not really good news. In the past year, prices have been rising, so paychecks have to stretch further. When inflation is taken into account, workers’ wages only grew by 0.6 percent within the past year.

Frustration over stagnant wages is the underlying factor behind widespread workers’ strikes across the country. In addition, congressional Republicans had promised that their massive corporate tax cuts would help the average worker, but the gains have been meager.

In short, despite some limited gains for the US job market, the latest data shows that employers are still being stingy with their workers.

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