Thread by @eliselgould

2019 ends with solid job growth and tepid wage growth.
epi.org/press/2019-end…
1/n #Jobs #JobsReport #BLS #Wages

This morning’s report from the Bureau of Labor Statistics shows that December payroll employment growth was 145,000 and year-over-year nominal wage growth was 2.9%—the lowest it’s been in 18 months. The unemployment rate came in at 3.5%, holding steady since November.
2/n

Today’s report gives a look back on all of 2019. Average monthly job creation has held remarkably steady for the past nine years, but it did soften in the last year, from 223,000 in 2018 to 176,000 in 2019, as the one-time boost of the fiscal stimulus from 2018 has wore off.
3/n

At the current pace, the labor market continues to not only absorb population growth, but also chip away at the slack remaining in the labor market—workers who continue to be sidelined will enter or re-enter the labor market as opportunities for jobs and better pay expand.
4/n

Since Dec. 2018, the employment-to-population ratio rose as the unemployment rate fell. Therefore, the unemployment rate over the last year fell for the right reasons—not because workers despaired and gave up looking, but because more would-be workers actually found jobs.
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The overall 3.5% unemployment rate obscures the great variance of experiences in the labor market for different population groups. The black unemployment rate has come down significantly in the recovery, but it still is considerably higher than the white unemployment rate.
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The prime-age EPOP has now exceeded it's pre-Great Recession high point, hitting 80.4% in December. It remains significantly lower (1.5 percentage points below) its high point in the spring of 2000. Still room for improvement.
7/n

Wage growth has slowed for much of the year, further evidence that we are not yet at genuine full employment. After hitting a recent high point of 3.4% in Feb, the growth rate has measurably decelerated and closed out the year at only 2.9% in Dec, the lowest in 18 months.
8/n

Any optimism over the faster wage growth among production/nonsupervisory workers this fall has now been shattered as wage growth for the roughly bottom 82% of the workforce saw a marked deceleration in December down to 3.0% year-over-year, its lowest point in over a year.
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As it turns out, workers who left or never entered the labor force during the Great Recession and its aftermath were not necessarily permanently sidelined, but have systematically been returning to the labor market as job opportunities have strengthened.
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The share of newly employed workers who did not look for work the previous month continues to be at historic highs. About three-fourths of newly employed workers are coming from outside the labor force (as opposed to those officially counted as unemployed).
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Overall, the number of jobs still being created with the unemployment rate at near-historic lows along with slower than expected wage growth undermines the conventional wisdom that the economy has reached or passed full employment.
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Looking ahead, if the Federal Reserve stays the course and there are no unexpected policy decisions elsewhere, I expect the labor market to continue growing stronger in 2020.

For up-to-date Jobs Day graphics, visit epi.org/indicators/une…

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