Popular Economics Weekly
The economy generated 271,000 new jobs last month, with all but 3,000 coming in the private sector, the government said Friday, topping expectations for 190,000 to 240,000 jobs predicted by various economists. Almost every major industry boosted payrolls.
Even bigger news is that on November 5, 2015, the U.S. House of Representatives passed the bipartisan Surface Transportation Reauthorization and Reform Act, a new multi-year transportation authorization bill, by a vote of 363-64. In other words, we are one step closer to a six-year transportation bill that will boost jobs and economic growth for years to come.
The jobs report showed that a long-awaited acceleration in wages might finally be happening, another plus for economic growth. Hourly pay rose at the fastest year-over-year pace since the U.S. exited recession in mid-2009. Economists have been expecting a faster increase in pay amid a deep drop in unemployment and the creation of millions of new jobs over the past several years.
In October, average hourly earnings for all employees on private nonfarm payrolls rose by 9 cents to $25.20, following little change in September (+1 cent). Hourly earnings have risen by 2.5 percent over the year.
The rebound in hiring in October was driven almost entirely by service sector jobs, such as software design, banking, health care, shopping and restaurants. White-collar businesses added 78,000 profession jobs. Health care added 45,000 positions. Retailers took on 44,000 new workers, and restaurants hired 42,000 people. Builders also beefed up employment by 31,000, reflecting an upturn in construction over the past year, and the new transportation bill will boost more construction jobs, as well as heavy machinery and other industries that feed infrastructure spending.
As background to the just passed House transportation bill, earlier this summer the Senate passed their proposal for the same bill. The next step is the House and Senate must reconcile the differences between their two versions and pass a compromise bill. The most recent extension of the current transportation program expires November 20 so they will have to work quickly.
The Senate passed its long-term highway bill in July, though their work on federal infrastructure funding isn’t over. Senators voted 65-34 to approve the six-year bill, which funds federal highway and infrastructure projects for three years.
The legislation would be used to pay for about $47 billion of funding for the Department of Transportation’s Highway Trust Fund. That funding accounts for only the first three years of the legislation. Under the Senate bill, senators would have to determine by 2018 how to pay for the full six years.
The labor market as a whole is now the healthiest it’s been in years. The U.S. has added an average of 206,000 jobs a month in 2015, in part because the seasonal adjustments were readjusted to add more jobs to past months. This usually happens during the summer months because Labor Department statisticians tend to overcompensate for seasonal hires in the summer. As much as one million more workers were hired this past summer than in past years, which might become the new normal for the next couple of years, if the unemployment rate drops below 5 percent.
The change in total nonfarm payroll employment for August was revised from +136,000 to +153,000, and the change for September was revised from +142,000 to +137,000. With these revisions, employment gains in August and September combined were 12,000 more than previously reported.
As a result, the number of people who can’t find work or who can only get part-time jobs continues to shrink. The so-called U6 unemployment rate that takes these people into account dropped to 9.8 percent in October, the first time it’s fallen below 10 percent since May 2008.
The labor market is still not fully healed, however, says Marketwatch. Some 15.6 million Americans who want a full-time job can’t find one, an unusually high number after more than six years of economic recovery. The percentage of able-bodied people 16 or older in the labor force also sits at a 42-year low. It was unchanged at 62.4 percent in October.
Harlan Green © 2015
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