As an election season defined by fears about jobs and wages enters the final stretch, the American economy looks more resilient than some campaign rhetoric might suggest.þþEmployers added 156,000 jobs last month, the Labor Department said Friday, enough to accommodate new entrants into the labor force and draw back workers who dropped out after the Great Recession.þþThe unemployment rate, which has been stuck at 4.9 percent since the spring, ticked up slightly to 5 percent.þþFor all the anxiety at home as well as turmoil abroad, like the “Brexit” vote in Britain, the American job machine continues to hum along.þþAverage hourly earnings moved higher by 0.2 percentage point last month, bringing the wage gain over the last 12 months to 2.6 percent.þþWhile Friday’s figures aren’t likely to change expectations that the Federal Reserve will raise interest rates late this year, there was little in the report to suggest job gains might trigger inflation.þþ“There are still plenty of unemployed people out there, enough for employers to continue to hire at a substantial pace,” said Michael Gapen, chief United States economist at Barclays.þþ“The expansion will end before you run out of labor,” added Mr. Gapen, who estimates the unemployment rate could drop to 4 percent by the end of 2017. Indeed, the participation rate inched up to 62.9 percent, which explains the rise in the overall jobless rate to 5 percent.þþMoreover, the labor force itself jumped by nearly half a million, a bright spot in an otherwise steady-as-she-goes picture of the economy.þþ“It was solid, not spectacular,” said Diane Swonk, a veteran independent economist in Chicago. “The good news is that participation went up, even though the unemployment rate did too. Regaining that ground is very important.”þþBefore the report, economists on Wall Street had been looking for a gain of 172,000 jobs in September. September’s figure was slightly weaker than expected, while revisions for July and August showed 7,000 fewer jobs were created in those months than the Labor Department first estimated.þþTo be sure, tens of millions of workers have barely felt the benefits of the recovery.þþAnd despite robust hiring in late 2015 and during much of 2016, notable pockets of economic weakness remain, more than seven years after the start of the current recovery, especially in the oil industry and some industrial sectors.þþThe proportion of Americans in the labor force remains near 40-year lows, a sign that workers who gave up on finding jobs in recent years are only slowly returning to positions at malls, offices, factories and other workplaces.þþBut with many prime-age workers still available to be hired — what experts and policy makers at the Federal Reserve blandly term “labor market slack” — the current pace of hiring should be able to continue without much threat of overheating the economy.þþThose two contrasting realities — healthy hiring and falling unemployment on the one hand, millions of economically sidelined Americans on the other — sustain the narrative of the two main presidential candidates, Hillary Clinton and Donald J. Trump.þþBoth candidates’ critiques of the economy contain kernels of truth. Friday’s report, while generally strong, contained fodder for both.þþThe jump in participation, along with healthy gains in higher-paying professional services fields, bolsters Mrs. Clinton’s case that the economy is growing steadily and creating decent-paying jobs. The drop in manufacturing jobs by 13,000 will underscore fears among blue-collar voters that their livelihoods are imperiled, a main factor in Mr. Trump’s appeal.þþAlthough Wall Street watches every jobs report, this one will garner less attention because the Federal Reserve isn’t expected to raise rates until December at the earliest. The Fed will meet in November, but it is not expected to raise rates so close to the election.þþMoreover, holding off until December to decide on whether to tighten monetary policy would also give policy makers both the October and November jobs report to consider before their December meeting.þþDespite steadily rising payrolls over the last several years, month-to-month wage gains have been very uneven this year. A big jump in January was followed by almost no increase in February. Similarly, a healthy performance in July seemed to peter out in August.þþBefore Friday’s report, wages were up 2.4 percent over the last year. That is slightly better than the 2.3 percent annual increase in 2015, but it is still less that many recession-ravaged workers would hope to see at this point in the recovery.þþStill, there are plenty of signs the tighter labor market is finally paying off and producing raises, particularly at the bottom and the top of the pay scale. It may also indicate that minimum wage increases in many states are beginning to filter through the broader economy.þþWhile some big employers have slowed the pace of recruiting slightly, they continue to add to payrolls. Ernst & Young, the giant accounting and consulting firm, plans to hire 15,200 people in the United States in fiscal 2017, which began July 1.þþIn fiscal 2016, Ernst & Young hired 16,375 people, said Dan Black, EY Americas recruiting leader. “It’s not a put-the-brakes-on moment,” he said. “It’s more of a maintain-and-sustain scenario.”þþAnother reasons for the slight downtick in hiring is that existing workers seem less likely to jump ship right now, according to Mr. Black. “There’s been a lot of uncertainty and it’s coming to a head with Brexit and the election,” he said. “People may be hunkering down more than they have in the past.”
Source: NY Times
