What's going on?
America’s getting down to work! The US economy created more jobs than expected in the month of June, but continued low wage growth was a bit of a downer on Friday’s upbeat news.
What does this mean?
Last month, American employers accelerated their pace of hiring and created 222,000 new jobs (tweet this). On top of that, unemployed Americans are finding new jobs at the fastest rate in nine years. The unemployment rate did tick up a smidge to 4.4%, but that reflects more people looking for work (if someone is not actively looking for work then they are not counted as “unemployed”).
Why should I care?
The bigger picture: Where’s the wage growth?
A big question for policymakers in 2017 is why more employment isn’t feeding into bigger paychecks for employees. Typically, more demand for workers should force companies to pay more for them. Some say that something’s not quite right in the economy if more and more people are working but wages aren’t increasing all that much.
For markets: The news will help spur on economic optimism in America.
American stock markets have been hitting historic highs this year, in part because investors believe that President Trump’s administration will deliver on promised reforms to the economy. Now that those plans are proving more politically difficult than anticipated, some are warning that the balloon of optimism has already popped. However, Friday’s jobs report certainly suggests that things are on the up in the US economy – so investors might not be in any rush to reverse their bets.