Jobs Data Show Steady Gains Even as Voters Signal Anxiety
Three days after voters expressed their discontent with the state of the economy, the government on Friday reported strong signs of improvement, estimating that employers added 214,000 jobs in October, while the official jobless rate dropped for the second month in a row to 5.8 percent.
The increase puts the average monthly employment gain for the past six months at 235,000 — an indication, analysts said, that the economy’s progress after years of meager growth was on the upswing.
A range of other job measures all improved, including a huge increase in the number of people reporting in a separate survey by the Labor Department that they found a job last month. At the same time, the government revised the figures for the two previous months, adding 31,000 more jobs to the numbers previously reported for August and September.
The primary disappointment was the lack of wage growth. Hourly average earnings have remained stuck, rising only 0.1 percent in October, on the heels of a 0.2 percent fall in real hourly wages in September.
Michael Gapen, an economist at Barclays, said, “We think this is a very strong report,” and noted that the number of hours worked was on the upswing, rising 4.2 percent in the fourth quarter.
This latest report represents 56 consecutive months of private-sector job growth, which Jason Furman, chairman of President Obama’s Council of Economic Advisers, characterized this week as “the longest streak in U.S. history.”
Yet, as Mr. Furman and other economic experts readily acknowledge, the experience of many Americans does not match the growing optimism about the job market and the overall economy recently expressed by several analysts.
Election Day exit polls found that 78 percent of those surveyed were very or somewhat worried about the future direction of the economy, while two-thirds said they believed the economy was getting worse.
For many Americans, it still is. Even though the recovery from the recession is in its sixth year, stagnant wages, an economy generating jobs mostly at the bottom and the top rather than in the middle, and vast disparities between the rewards bestowed on the rich and on ordinary workers have left many people disenchanted with their economic prospects.
Some analysts now see signs that a tighter labor market may lead to higher wages in the near future. “The job market is steadily picking up pace,” said Mark Zandi, chief economist at Moody’s Analytics, reacting to a report from the payroll processor ADP this week that private sector employment increased by 230,000 jobs in October.
“The job market will soon be tight enough to support a meaningful acceleration in wage growth,” he added.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, was also predicting “faster productivity growth would drive real wages higher next year, after a very long wait.”
The question is how much and how quickly.
Over the year, average hourly earnings have risen by just 2 percent, only slightly ahead of the pace of inflation. “We are adding jobs, but it is still a wageless recovery,” said Elise Gould, an economist with the left-leaning Economic Policy Institute.
In a report, the institute argued “that wage growth is far below the 3.5 percent rate consistent with the Federal Reserve Board’s inflation target of 2 percent, and far below the 4 percent rate that could easily be absorbed for a while to restore labor’s share of national income from its current historic lows.”
The lack of wage growth, particularly at the bottom, helps explain why ballot measures to raise the minimum wage in Alaska, Arkansas, Nebraska, Illinois and South Dakota all passed despite widespread losses among Democrats in those states supporting such measures.
While stagnant wages remain one of the biggest problems plaguing the economy, the recovery appears to be gaining momentum.
The four-week moving average for new unemployment insurance claims, considered a more reliable indicator than the week-to-week fluctuations, hit a 14-year low last week. For the federal fiscal year that ended on Sept. 30, the number of bankruptcy cases filed in federal courts dropped 13 percent to 963,739, the lowest since the 2007 fiscal year. And consumers, bolstered by falling gasoline prices, are more upbeat about job prospects than at any time in the past six years.
Steve Roesner, chief executive officer of Quatro Composites in Iowa, which produces structures for manufacturers in the aerospace industry, hired 100 new workers this year, bringing the company’s total staff to 220. He said he expected to increase his work force 20 percent more next year. “In our industry, there’s a lot of optimism,” Mr. Roesner said. He attributed the boom, in part, to technological advances.
Jay Floersch, solutions architect at Aon Hewitt, a human resources consulting firm, said business had picked up significantly in recent months.
“We’re exceeding our own forecasts,” he said, noting that “seasonal hiring is peaking right now.”
Looking ahead, Tara M. Sinclair, an economist at Indeed.com, one of the nation’s largest sites for job postings, said: “We seem to be reaching a tipping point in terms of job market maturity. Should this positive trend continue, we should expect people to stop looking for ‘a job’ and start to look for ‘the right job.' ”
A recent job fair in Somerset, Pa. Election Day exit polls found that two-thirds of those surveyed said they believed the economy was getting worse. Credit John Rucosky/The Tribune-Democrat, via Associated Press Jobs Data Show Steady Gains Even as Voters Signal Anxiety
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