Jobs Report's Dark Side, in Charts
Anyone looking for signs of inflationary pressures -- or hoping to see workers getting a raise -- will be disappointed by today's jobs report. Wage growth stalled in September, though folks who work in service and with their brains did better than others.
Overall, the report offered a slightly brighter picture of the recovery. The Labor Department estimated that nonfarm employers added 248,000 jobs in September, bringing the three-month average to about 224,000 jobs, more than enough to compensate for population growth. The unemployment rate fell sharply, to 5.9 percent from 6.1 percent in August -- though the decline was driven in part by shrinking participation in the labor force (only those actively looking for work are counted as unemployed). The share of the population with jobs held steady at 59.0 percent.
So far, the job creation doesn't appear to be having much effect on pay. The Labor Department estimated that the average hourly wage actually fell in September, bringing the three-month annualized pace of growth down to 1.3 percent (see chart). Since the economy hit bottom in mid-2009, the growth rate of wages has hovered around 2 percent, just enough to compensate for inflation.
People in service sectors -- and particularly in knowledge industries -- have fared relatively well. Over the three months ended September, the average hourly wage for information workers increased at an annualized rate of almost 10 percent (see chart). Oddly, detailed data (available only through August) suggest the increase was driven in part by newspaper and periodical publishing, a business that has been suffering waning advertising revenues and staff cuts. Wages in leisure and hospitality rose at a 3.2 percent annualized pace. Pay in manufacturing, which was among the leaders a couple months ago, actually declined.
All told, the data offer little reason for concern that the Federal Reserve's efforts to stimulate economic growth is stoking the kind of spiraling increases in wages and prices that inflation hawks fear. On the contrary, it would be good to see more raises.
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