March 6, 2015
A burst of hiring in February underscored the resilience and confidence of U.S. businesses, which are adding workers at the fastest pace in 17 years. Yet the strong job gains did little to raise wages last month.
The unemployment rate fell to 5.5 percent from 5.7 percent, the government said Friday. But the rate declined mainly because some people out of work stopped looking for jobs and were no longer counted as unemployed.
The average hourly wage rose just 3 cents to $24.78 an hour. Average hourly pay has now risen just 2 percent over the past 12 months, barely ahead of inflation.
Still, over that time, 3.3 million more Americans have gotten jobs. More jobs and lower gas prices have led many consumers to step up spending. That’s boosting the economy, offsetting sluggish growth overseas and giving employers the confidence to hire.
Most economist have forecast that the economy will grow about 3 percent this year, supporting about 250,000 job gains a month. Those increases should raise pay this year, they say.
Friday’s figures provide “more evidence that the labor market is recovering rapidly, with employment growth more than strong enough to keep the unemployment rate trending down,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics. Falling unemployment “makes more acceleration in wages increasingly likely.”
At 5.5 percent, the unemployment rate has now reached the top of the range the Federal Reserve has said is consistent with a healthy economy. That could make it more likely that the Fed will raise interest rates from record lows as early as June.
“This is quite a symbolic change that increases the pressure on the Fed to hike rates in June,” said Paul Dales, an economist at Capital Economics said.
Indeed, after the jobs report was released Friday, investors sold ultra-safe U.S. Treasuries, a sign that many anticipate a Fed rate hike.
Courtesy of The Daily Times Herald, 3/6/15.