Economy: Full employment or so-so?

     For example: Employees should make enough money to support themselves – a living wage.  If a business makes a profit, it should share that with employees. And it follows that if productivity goes up – if employees produce more per hour – their pay should increase too.
     Even though economic news is good these days, it’s hard to get too excited about it. Here is why, along with links for further study. 

• First, the good news: In April, the economy added 263,000 jobs. The unemployment rate fell to 3.6 percent.

• More good news, productivity is up: "Labor productivity increased 3.6 percent in the first quarter of 2019," the U.S. Bureau of Labor Statistics reported May 2. "Output increased 4.1 percent and hours worked increased 0.5 percent."

• But here’s the thing: Fewer people are out trying to get a job. “The overall labor force participation rate has dropped 0.2 percentage points for two months running,” pointed out the Economic Policy Institute, a nonprofit think tank, “and now sits where it was exactly a year ago at 62.8 percent.”

• Some people want to work full time but can’t: “The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed at 4.7 million in April,” the U.S. Bureau of Labor Statistics reported. “These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or because they were unable to find full-time jobs.”

• So, when the country is at full employment, businesses usually raise wages to keep or attract workers. In this case, wages are up but it’s not all that impressive:  “Wage growth held steady at 3.2 percent, where it has hovered for the past nine months,” the Economic Policy Institute reported. “That’s higher than much of the recovery, but still below the 3.5 percent level that would be consistent with the Fed’s targets for inflation and long-term potential productivity growth.”

      To know more:

• Economic Policy Institute (EPI.org): Economic Indicators, jobs and unemployment, April 2019, May 3, 2019, by Elise Gould.
• United States Department of Labor, Bureau of Labor Statistics (bls.gov), Productivity and Costs, May 2, 2019.
• United States Department of Labor, Bureau of Labor Statistics (bls.gov), The Employment Situation, May 3, 2019.

      Related:

      China or the U.S.: Which economy is on top?

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