After a year of solid—if at times uneven—job growth, 2016 looks like it will close on an economic high note. On Friday morning, the Labor Department reported that the the unemployment rate dropped to 4.6 percent—the lowest since before the recession. The U.S. economy added 178,000 jobs in November, meeting the expectations of economists surveyed by The Wall Street Journal who anticipated that 180,000 jobs added.
The numbers are once again indicative of steady economic growth, but there’s less positive news mixed into the report as well: While the number of jobs added and the unemployment rate bode well for the state of the economy, economists have been looking for wage growth and an increase in labor-force participation this year, both of which would have indicated that the labor market is not just growing, but strengthening. A tightening labor market would produce better pay for American workers and allow those who dropped out of the workforce during the recession to return to work. In November, both of those numbers were down.
For wages, some improvement has happened: In recent months, average hourly earnings reached a high of $25.92, compared with $24.76 in January of this year. October’s wage growth, at 2.8 percent, was the strongest reading since the recession. But in November, average hourly earnings disappointingly fell 3 cents, to $25.89, following a 10-cent increase in October and an eight-cent increase in September. This slowdown, which was somewhat expected, brings the overall wage growth in the past 12 months to 2.5 percent. But that rate has been fairly constant throughout 2016, which is a positive sign.