The American economy entered the summer powered by a decent head of steam, as employers added 223,000 jobs in June and the unemployment rate fell to 5.3 percent.þþAfter bottoming out in March as the overall economy stalled, hiring has rebounded in recent months along with other indicators like home sales and consumer spending.þþDespite the drop in the unemployment rate, from 5.5 percent in May, average hourly earnings stayed flat, disappointing hopes that wages were finally increasing for many workers.þþIn another cautionary development, the participation rate, which in many ways is a better gauge of economic robustness than the oft-cited jobless rate, fell 0.3 percentage point in June. With June’s drop, the participation rate is now at its lowest level since 1977. And the job gains for April and May were revised downward by 60,000 jobs.þþThe job market’s steady pace of growth this year stands in sharp contrast to the situation overseas. Europe has been rocked by the continuing drama over whether Greece will exit the eurozone, and concerns are rising about the fallout from the slowdown in China’s once white-hot economy.þþPolicy makers at the Federal Reserve are keeping a close eye on conditions abroad and volatility on Wall Street and overseas bourses, which could shift the timetable for the central bank’s long-awaited increase in short-term interest rates if markets show signs of panic.þþSo far, anything resembling the contagion of 2008 has not materialized, despite Greece’s slow-motion descent into financial chaos. Although the jobs data for June suggest a September rate hike by the Fed is still possible, experts caution that it is far from a lock given the uncertainty overseas.þþThe Fed and private economists have been watching participation in the labor market closely for any sign that millions of unemployed Americans who gave up and dropped out of the work force after the recession are finally looking for jobs again.þþWhile exporters have had to contend with the headwinds from Europe, China and a stronger dollar, domestically focused sectors like construction, health care and education have supplied much of the labor market’s overall momentum.þþWhat’s more, white-collar workers in fields like finance, insurance, software and marketing have been in high demand lately, a turnaround from the early days of the recovery when many new jobs tended to be in low-wage sectors like retailing and restaurants.þþSince last summer, for example, the financial sector has added more than 100,000 new positions, bringing total employment in finance to just over eight million, the highest level since the fall of 2008, when Lehman Brothers collapsed.þþ“We’re seeing companies put money into the back office,” said Tom Gimbel, chief executive of LaSalle Network, a Chicago-based staffing firm. “They want to hire for permanent positions in areas like marketing, human resources and accounting.”þþDespite these signs of health, the American economy still has a feast-or-famine quality in many corners.þþFor example, wage growth has picked up slightly this year but gains remain relatively restrained. Over the last 12 months, earnings are up 2 percent.þþEven as those back office, white-collar jobs are filled with workers who nearly always have a bachelor’s degree, Mr. Gimbel noted, employers also want college graduates for positions where a high school diploma used to suffice, like call center operators.þþAs the pool of college graduates has grown larger, younger workers have found themselves forced to take jobs they once would have turned down cold.þþ“More kids are going to college and some of them don’t have any choice,” Mr. Gimbel said. “It’s not just the Big 10, Notre Dame and the Ivies anymore.” Students from less prestigious colleges or candidates with lower grade point averages are taking jobs at call centers earning $25,000 to $30,000 a year, he said.þþPreferred sectors for new college graduates entering the work force this summer, like sales, marketing and administration, pay in the range of $30,000 to $35,000 annually, Mr. Gimbel said. One major exception to the pattern of stubbornly slow raises is the technology sector, especially for workers fluent in coding, programming and software development.þþ“Depending on their level of experience, a good coder can earn $100,000 to $175,000,” he said. “We never have enough candidates.”þþ
Source: NY Times
