- The latest jobs report from the Bureau of Labor Statistics revealed a 50-year low for the US unemployment rate. But it also showed wage growth slowing to its slowest pace in more than a year.
- The phenomenon of slowing wage growth and rising employment levels has persisted for years, and is likely the result of several trends in the national labor market.
- Here are some of the factors likely stifling wage growth around the US, and why a low unemployment rate isn't necessarily linked to improved earnings.
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The latest jobs report from the US Bureau of Labor Statistics showed the unemployment rate dropping to a 50-year low in September. But the data isn't wholly positive.
The US added 136,000 nonfarm payrolls last month, lower than analysts' 147,000 estimate and August's 168,000 gain. Average hourly earnings grew by 2.9% from the year-ago period, the metric's slowest pace of growth since July 2018 - and just 1.2 percentage points higher than the last recorded US inflation rate.
And though the unemployment rate may be at a five-decade low, slowing wage growth is a dire threat to the nation's economy. Lower income generally begets decreased spending, kicking off a cycle that could threaten employment, investment, and economic growth.
Here are some reasons why a lower unemployment rate hasn't brought steady wage growth, and what could be pulling average hourly wages down across the US: