We all know the employment number can be fiddled with, but generally one can ascertain a trend from this number. There are still people who just fell off the work wagon during the Great Recession and haven’t returned. Many of these people were men in their 50s who have now transitioned to life on Social Security, which is a shame. There are other factors like the expanding under-the-table economy and immigration ebbs and flows that must be considered. But generally this feels about right to us and we communicate with all kinds of people from all over the country. We have a reasonably good sample from which to draw trends.
And I’ll say this. On a recent family ski trip we drove across the spine of the West Virginia Allegheny Mountains and I saw “help wanted” signs in the windows of stores and restaurants. This is an all too often depressed part of America. I hadn’t seen such signs in over a decade. I wouldn’t say things were booming, but there were flickers of economic life where there were none.
There are a million deep fissures in the American economy from which an earthquake may rumble. Consumer debt is uncomfortably high again and that is not good. But in the immediate term things are looking OK. We certainly sense it. Many people will see the first halfway decent summer in a long time. We’ll be watching for a rise in beach rental rates.
The number of vacancies is pulling well ahead of the number the Bureau of Labor Statistics counts as unemployed. This year is the first time the level of the unemployed exceeded the jobs available since the BLS started tracking JOLTS numbers in 2000.
As of April, the total workers looking and eligible for jobs fell to 6.35 million, a decrease from 6.58 million the previous month. The number fell further in May to 6.06 million, though there is no comparable JOLTS data for that month.
Under normal circumstances, the mismatch would be creating a demand for higher wages. However, average hourly earnings rose just 2.7 percent annualized in May, up one-tenth of a point from April.
“Given these trends, the sluggish wage growth rate is even more perplexing,” said Cathy Barrera, chief economist at ZipRecruiter, an online employment marketplace. “If employers want to fill these 6.7 million job openings, they are either going to have to raise wages or find more clever and creative ways to recruit workers off the sidelines.”
This report says that wage gains are still small. I think that feels true. But it also feels like wages have a bit of momentum going into the second half of the year.