Last week, the Bureau of Labor Statistics released their monthly “jobs report.” It showed the labor market is strong and getting stronger. The three-month rolling average was 211 thousand jobs, compared to a 2019 average of 175 thousand jobs created each month. The market yawned.
Can you remember that from October of 2008 to March of 2009, America LOST an average of 712 thousand jobs per month? While that began improving in April of 2009, a total of 8.7 million workers lost their job during the Great Recession. The market was definitely not yawning at that time.
Despite the strong growth, the unemployment rate ticked up last month from 3.5% to 3.6%. That’s actually more good news, because even more workers returned to the workforce. The Labor Force Participation Rate ticked up from 82.9% to 83.1%, the highest since the Great Recession. One reason workers are returning to the workforce is the continued increase in wages. With inflation at 2%, the 3% increase in average wages boosts real income and spending. (The average wage increase for those already working may be larger than 3%, because workers returning to the labor force don’t start at the top earning jobs.)
Now, can we stop yawning and celebrate the strong labor market for one day each month? That still leaves plenty of time to fret about the monthly deficit.