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Employers added 196,000 new jobs to the US economy in March, a bit more than economists had hoped. latest report on the Bureau of Labor Statistics jobs. But wage growth has slowed again.
Despite the tightening labor market, workers only received an increase in their average hourly wage of 4 cents in March. A month earlier, wages had jumped about 10 cents, the fastest since 2017.
And all the hirings made in March did not contribute much to changing the unemployment rate, which was already very low, and remains at 3.8%.
The new data shows that the US economy remains strong even if it is not really booming. For example, the average monthly employment growth in the first quarter of 2019 was about 180,000, which is lower than the monthly average of 223,000 in the same period in 2018. The decrease is not alarming; This simply suggests that the economy is not growing as fast as before and that the current labor shortage is preventing employers from filling all vacancies.
The strength of the labor market is a good sign for workers. Such a low unemployment rate means that almost all Americans who want to work and are able to do so have already landed a job. And those who lose their jobs or decide to leave will probably have no difficulty finding another job.
However, the latest employment report once again shows low wage growth, which remains the biggest weakness of the US economy. The average American worker has not seen his salary increase much since the Great Recession, which ended around 2009.
In March, private sector workers (excluding farm workers) had an average hourly wage increase of 4 cents, for an average hourly wage of $ 27.70. In the last 12 months, average hourly earnings increased by only 3.2%, which does not even account for inflation.
The jobs report, however, points to a strong and stable economy, generating the largest number of new jobs created for hospital and ambulance staff, nurses and software developers.
Thus, even though Americans find jobs quite easily, they still do not see the so-called "economic boom" reflected in their paychecks.
Salaries barely increased in March
Slow growth in income is the most persistent problem for the US economy in its recovery from the Great Recession. Salaries have barely maintained with the cost of living, even as the unemployment rate has dropped and the economy has developed.
The increase in the average hourly wage of 4 cents in March seems closer to the same thing, despite a surprising 10 cent rate. jump in February (at the beginning, the labor department had recorded an increase of 11 cents, but had revised it down by a cent).
Over the last year, the cost of food and housing has increased, forcing paychecks to stretch further. But because of the recent drop in gas prices, the annual inflation rate fell to 1.5%, up from 2.4% in 2011, the maximum Consumer price index). So, taking into account inflation, workers' wages have increased by about 1.9% over the last year. This is much faster than their growth since the start of the recession in 2007, but it's still pitiful when compared to the astronomical payments Business leaders get.
Frustration over stagnant wages is also the major underlying factor behind generalized strikes by workers across the country in places like California, Illinois and Missouri. Congressional Republicans had promised that their massive cuts in corporate taxes would help the average worker, but the the gains were meager.
In response, voters in some states forced companies to pay a salary increase to lower-paid employees.
In mid-term elections in November, voters in Missouri and Arkansas mass voting measures approved this will increase the minimum wage for nearly 1 million workers in both states. And thanks to the new laws, low-wage workers in 19 states got wage increases on January 1.
These laws have helped raise wages so far in 2019. Next month's employment report will show whether a growing labor shortage will force employers to raise wages even faster, and if that is enough to alleviate the frustration of workers who are still struggling to pay their bills.
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