Wall Street rebounds after federal jobs report shows continued wage stagnation
7 July 2018
Following weeks of uncertainty over the escalating trade war measures imposed by the United States on China and other economic rivals, U.S. stock indexes ended the week with a rally in response to Friday’s release of the Bureau of Labor Statistics (BLS) June jobs report, which found that continued job growth has still not produced any significant increase in wages for workers.
According to the BLS report, titled “The Employment Situation—June 2018,” total nonfarm employment increased by 213,000 in June. However, the official unemployment rate increased from 3.8 percent to 4 percent, largely as a result of more people entering the workforce and actively looking for jobs. The labor force participation rate rose by 0.2 percent to 62.9 percent in June, remaining below pre-2008 levels.
The U-6 unemployment measure—which includes those who have given up searching for work, are marginally attached to the labor force (due to lack of steady employment), and those who are forced to work part-time but would like to work full-time—also moved up by 0.2 percent to 7.8 percent over May’s report.
In spite of the tightening labor market, however, wage growth remains anemic. Wages increased by 0.2 percent from May to June of this year, and 2.7 percent since June 2017. This means that workers’ wages will likely fall behind the rate of inflation, which in May reached 2.8 percent.
The combination of strong job growth with stagnant wages has been an ongoing pattern in jobs reports since the 2007-2008 financial crisis and subsequent “Great Recession.” Neither the BLS report nor any of the establishment press outlets have sought to provide any explanation for this…