Last month’s US employment report, released on Friday, contained a lot of good news.
First, monthly jobs growth exceeded expectations, as employers hired 280,000 people. Second, the labor force participation rate ticked up, indicating that people who had stopped looking for work were becoming more optimistic about finding a job and thus had resumed their search for one.
Finally, average hourly earnings for all production and non-supervisory workers in the private sector grew by 2%, compared with May 2014.
Some people may question why wage growth of 2% would be considered good news. The reason is there was no rise in prices over that period, so the average real wage also grew by about 2%. And it is the real wage, rather than nominal pay without accounting for inflation, that ultimately determines the living standards of the American worker.
While the first two highlights from the jobs report are…
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