The employment report for last month has just been released, and the news is decidedly mixed, albeit unsurprising. Lower wages, more jobs, not good paying jobs, fewer labor force participants and low inflation are the top-of-mind highlights/lowlights of the just issued report.
U.S. adds 252,000 jobs in December, unemployment falls to 5.6% has the breaking news concerning the nation's employment situation this morning:
"The U.S. added 252,000 jobs in December and the unemployment rate fell to 5.6% from 5.8%, but hourly wages declined and more Americans dropped out of the labor force. Economists . . . had expected a seasonally adjusted gain of 230,000 nonfarm jobs in the last month of 2014.
Average hourly wages fell 0.2%, lowering the 12-month increase to just 1.7%, the Labor Department said Friday. Year over year increases have stuck to a tight range of 1.7% to 2.2% since 2010 even though hiring has surged.
The amount of time people worked each week, meanwhile, was unchanged at 34.6 hours to remain at a postrecession high. Employment gains for November and October were revised up by a combined 50,000. The government said 353,000 new jobs were created in November, up from a preliminary 321,000. October's gain was raised to 261,000 from 243,000.
The economy created 2.95 million new jobs in 2014, marking the biggest hiring spree since a 3.2 million increase in 1999. Yet the labor-force participation rate dropped 0.2 percentage points in December to 62.7%, matching a postrecession low and a level last seen in 1978."
See also Jobs Report: U.S. Adds 252,000 Jobs; Unemployment Falls to 5.6%.
Employment continues to increase at a nice pace, but wages continue to lag behind the increase in employment.
The unemployment rate continues to decline and may even go below 5% this year. That said, the long term unemployed seem to have dropped out of the labor force, and this is obviously a negative contributing factor to the reduced unemployment rate.
In sum, the U.S. economy keeps making progress, but there is a very long way to go before we reach any level that we used to refer to as 'normal.'
That's my take.