Jobs

Higher Jobless Rate Suggests Economy Has Room to Run

2/3/17
from The New York Times,
2/2/17:

Unemployment rate ticked up to 4.8% amid an increase in the share of Americans working or actively seeking work.

Despite brisk hiring, the U.S. unemployment rate rose in January and wages grew modestly, evidence for the Trump administration and the Federal Reserve that the economy has room to run before it overheats. The backdrop of a steady but unspectacular labor market is likely to keep the Fed cautious about raising interest rates and could prevent it from colliding with President Donald Trump as he aims for faster economic growth. Employers added 227,000 jobs last month, the biggest gain since September, the Labor Department said Friday. Job growth over the past three months averaged 183,000, in line with the trend in 2016. Still, the jobless rate rose to 4.8% in January from 4.7% a month earlier. More Americans came off the sidelines and actively looked for work, pushing up the count of unemployed. In one sense, that is a good development, suggesting increased optimism about the prospects of eventually finding work.

Those with jobs still aren’t seeing the big wage gains that characterized more prosperous economic expansions of the past. The average hourly paycheck grew just 3 cents over the month—and 2.5% over the year—despite millions of workers receiving raises under minimum-wage laws across 19 states at the start of the year. Still, it is better than the 2% rates that prevailed earlier in the expansion.

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