The American economy added 242,000 new jobs last month, 90,000 of which were needed to keep up with population growth. This means that net job growth clocked in at a respectable 152,000 jobs—and as usual, virtually all of it was in the private sector. The headline unemployment rate held steady at 4.9 percent. The number of employed people went up by a whopping 530,000, and labor force participation was up by 0.2 percentage points. Over the last two years, the employment-population ratio has been growing steadily, and it’s now up by a full percentage point since February 2014. This is very positive news: more and more people are re-entering the labor force and finding jobs.
Unfortunately, this strong employment result did nothing for wages: hourly earnings of production and nonsupervisory employees were flat compared to last month, and weekly earnings were down considerably, thanks to an across-the-board drop in the service sector. That’s unwelcome news after last month’s fairly robust wage growth. The economy is growing at a decent clip—and there are no signs of an imminent recession—but it’s just not sustaining much wage growth.