Youre Hired, America!

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What's going on?

In the latest sign of a pickup in global economic growth, another strong month of job creation in America helped push the unemployment rate to a 16-year low!

What does this mean?

Over 200,000 jobs were created in America in July more than Wall Street was expecting and an increase from previous months this year. However, despite the low unemployment rate, a wider measure of underemployment was unchanged (which includes, for example, people working part-time when they would rather be working full-time). So, there are still lots of potential workers sitting on the sidelines. One key question for the economy is whether those workers can be more quickly enticed to get back into work which becomes more likely as more jobs are created.

Why should I care?

The bigger picture: Americas job creation is part of an improving global economy.

Americas economy is getting some significant support from other major economies, notably China, Europe and Canada. The global economy is interconnected via trade and cross-border investment (e.g. iPhones sold in China can translate into more marketing jobs in California). Chinas economy continues to do relatively well, Europes growth is accelerating significantly this year and Canada, Americas biggest export market, is also picking up the pace. The global breadth of the economic recovery this year is one of its most notable strengths.


For you personally: Wages should be going up more quickly.

With unemployment so low and more workers coming off the sidelines, companies are likely going to have to start paying higher wages in order to attract workers. This is already starting to happen, although the 2.5% wage growth over the past year remains low by historic standards. The good news for workers is that while they wait for faster pay increases, inflation remains low, which means their costs shouldnt be increasing quickly either (so theyll have more cash at the end of the day).

Originally posted as part of the Finimize daily email.

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