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The latest jobs report shows no evidence of a potential economic recession

That doesn’t mean the economy is booming.

 Ryan Brown, R, does balancing exercises with physical therapist Caitlin Ayers at the rehabilitation center of Inova Mount Vernon Hospital on Thursday, May 4, 2017, in Alexandria, VA. On May 5, 2016, Ryan Brown left work at the U.S. Patent and Tradem
Physical therapist Caitlin Ayers works with a patient at the rehabilitation center of Inova Mount Vernon Hospital on May 4, 2017, in Alexandria, Virginia. The health care industry has been fueling recent job growth.
Jahi Chikwendiu/The Washington Post via Getty Images

Job growth slowed in July, with 164,000 new jobs added to the US economy, compared to the 224,000 positions created in June, according to the latest jobs report from the Bureau of Labor Statistics.

While an overall decline in job creation since the beginning of the year has fueled panic about a potential economic recession, there’s no evidence in the latest jobs report that a downturn is around the corner. In fact, nearly all the data released Friday suggests the US economy is quite healthy.

The super-low unemployment rate, for example, didn’t budge in July at 3.7 percent. That’s still the lowest rate of unemployed Americans recorded since December 1969.

Yet this good news doesn’t mean much to middle- and working-class families: Workers only got an average hourly pay raise of 8 cents in July, the same as a month earlier. Job security may be one of the few benefits employees can count on these days.

Nearly every American who wants to work and is able to has snagged a job by now, and those who lose their jobs, or decide to leave, probably won’t have a hard time finding another position.

But millions of Americans are working part-time jobs when they would rather get full-time gigs, or at least work more hours. The number of people in that group has been mostly shrinking but still added up to 4 million workers in July.

Most of the new job hiring last month was for positions in technical services and health care, which has been driving most of the job growth in recent months. Nurses, physical therapists, and speech pathologist technicians are in high demand right now.

US Department of Labor/Bureau of Labor Statistics

The average monthly job growth so far in 2019 is about 165,000, a notable drop from the 223,000 positions created on average each month last year. The decrease isn’t alarming; it just suggests that the current labor shortage is making it hard for employers to fill all the open positions. There are far more jobs available right now than there are people looking for work.

Businesses are hoarding profits

Even though Americans are finding jobs pretty easily, they still aren’t seeing the so-called “economic boom” reflected in their pocketbooks.

July was another month with disappointing wage growth. With such a tight labor market and rising productivity, workers should expect much bigger pay raises than they’re getting.

Private sector workers (excluding farmworkers) got an average 8-cent hourly raise, adding up to an average hourly pay of $27.98. In the past 12 months, average hourly earnings have increased by 3.2 percent. That’s a slight uptick from previous months but still represents disappointing pay growth when adjusted for inflation.

The latest pay data suggests that workers are still not benefiting much from the longest economic expansion in US history. Slow income growth has been the weakest part of the US economy in its recovery from the Great Recession. Wage growth has barely outpaced cost of living increases, even as the unemployment rate dropped and the economy expanded. July’s 8-cent average hourly wage hike suggests more of the same.

Over the past year, the cost of food and housing has gone up, so paychecks have had to stretch further. But because of a recent drop in the price of clothes and utilities, the annual inflation rate has fallen to 1.6 percent, compared to a high of 2.9 percent in 2018 (based on the Consumer Price Index). When you take inflation into account, workers’ real wages only grew about 1.6 percent over the past year. This is worth emphasizing: During the longest economic expansion in US history, with record-low unemployment, workers are only making 1.6 percent more than they did a year ago, after adjusting for inflation.

While paychecks are growing more than they did last year, the numbers are still pitiful when you compare them to the sky-high payouts corporate CEOs are getting. For example, CEOs got an average $500,000 pay bump in 2018, while the average US worker got an extra $1,000 — barely enough to outpace inflation.

Frustration over stagnant wages is also the major underlying factor behind widespread worker strikes across the country in places like California, Illinois, and Missouri (workers at Vox also recently staged a one-day walkout amid ongoing contract negotiations). In April, 31,000 supermarket employees went on strike in the Northeast to reverse proposed pay cuts and rising insurance premiums. The Stop & Shop strike in mid-April was the largest private sector work stoppage in years. After eight days with empty supermarkets, the company agreed to scrap its plan.

Some economists are confident that wages will start to pick up if this trend continues. “[T]he sharp increase in the number of working days lost to strikes over pay and benefits over the past year suggests that employees increasingly recognize that the balance of power has shifted in their favor,” Ian Shepherdson, chief economist for the research firm Pantheon Macroeconomics, wrote earlier this year in an analysis.

The widespread labor unrest underscores how the Republican tax cuts did little to help working-class families, despite all the promises from congressional Republicans.

In response, voters in some states have forced businesses to give low-paid employees a raise. In November’s midterm elections, voters in Missouri and Arkansas overwhelmingly approved ballot measures that will raise the minimum wage for nearly 1 million workers across both states. And as a result of the new laws, more than 5 million low-wage workers in 19 states got pay raises on January 1.

Those laws have helped boost wages so far in 2019, but not enough.