The December jobs report is out. The US economy added 252,000 jobs in the month of December, lowering the national unemployment rate to an impressive 5.6% from 5.8%. That capped off a strong year of job growth, the best year since 1999.
What has not increased is employer generosity. Despite strong job growth, wage growth has not kept pace.
Yet the surge in new job creation and sinking unemployment still haven’t led to sustained increases in how much American workers get paid each hour, the key to putting the U.S. recovery on an ideal growth path. Wages fell 5 cents, or 0.2%, to $24.57 an hour. And the gain over the past 12 months slowed to just 1.7%.
Wage gains have averaged 2% or slightly less since 2010, just two-third as fast as they normally grow. Economists predict a tightening labor market will spur higher wages but so far earnings haven’t budged much. The Federal Reserve in December cited a lack of clear evidence of rising wages as reason it may keep interest rates near zero for an extended period.