Wednesday, March 11, 2015

More Jobs, Still Weak Wage Growth: The Federal Reserve Must Wait

By Thomas Palley

February’s employment report showed a gain of 295,000 jobs and a decline in the unemployment rate to 5.5%. The report is another in a string of strong employment reports, but it also contains depressingly familiar news about weak wage growth and millions of workers still short of work.

Job gains were spread widely across all sectors, with particularly strong gains in the service sector. Construction added another 29,000 jobs despite bad weather, and manufacturing added 8,000 jobs. The only significant weaknesses were in mining (down 8,000) and petroleum and coal products (down 6,000), reflecting lower energy commodity prices.

On the other side of the ledger, there continues to be abundant labor supply. Though the unemployment rate ticked down to 5.5%, there are still 8.7 million unemployed workers, another 6.6 million workers who are working part-time but want full-time work, and a further 6.5 million workers who would enter the labor force if a job were available. That totals 21.8 million workers who would like more work, which provides clear evidence we are still far from full employment.

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Trade and Finance

Teaching a course on international economics (trade and finance) for international relations students. More on that later. Just wanted to p...