Some swell, if not swelling, news from the December jobs report. The economy added in excess of 250,000 jobs, and the unemployment rate ticked down to 5.6 percent.
On the flip side, that’s mostly “the result of fewer people looking for work,” the AP reports — where on earth have we heard that before — and equally troubling and nagging is the story about wages.
The AP goes on:
A missing piece of the puzzle in 2014, and in the recovery overall, was stronger earnings growth. Average hourly wages fell 0.2 percent in December, to $24.57, the Labor Department said Friday. For the year wages rose a meager 1.7 percent — that’s down from 1.9 percent in 2013.
Following a typical recession, wage growth should reach 3 percent or higher. Weak pay hikes are keeping workers’ real income only slightly ahead of inflation, damping their purchasing power. Consumer spending accounts for roughly two-thirds of economic activity in the U.S., so an uptick in wages is vital to broader growth.
“Unfortunately, as great as the headline is, the wage data severely complicates matters. Average hourly earnings actually declined 0.2% in the month and the previous month was revised down,” Dan Greenberg of trading firm BTIG said. “The simple fact is we cannot consider an employment report a success, no matter how healthy the headline may be, if wage data does not begin to accelerate.”
Young people particularly have felt the crunch from stagnating wages — and even shrinking ones during the course of the last decade. In the year 2000, the median yearly earnings of an 18 to 34 year old employed full-time was $37,355.
Between 2009 and 2013, that number was $33,883.
