Each month, the United States Bureau of Labor Statistics releases their (in)famous jobs report. This report uses everything from industry statistics to payroll data to calculate the overall health of the job market. This ranges from seeing how many jobs were added to how many Americans are out of work. These numbers dictate the health of the economy, which has long-ranging effects on pretty much everything.
This month’s job report saw a few surprises. After last month’s slump in new jobs, employers added more jobs this month than expected. With those new jobs, however, came a few surprises, including a change in unemployment and overall pay. This might sound dull to you, but it more or less dictates how the economy works. Most importantly, there were five key factors from today’s jobs report that could have long-ranging impacts on your financial future.
1. There are 222,000 new jobs.
The economy added 222,000 new positions last month. Health care, business services, mining companies, and restaurants were among the leaders in job creation for the month. It’s worth noting that many of these new jobs are low-wage positions.
2. Unemployment is up.
Unemployment is up .1%, from 4.3% last month to 4.4% in June. Though 4.4% unemployment means slightly more workers out of a job and millions of Americans going without pay, it’s still a noticeable decrease from the same time last year. Zero percent unemployment is theoretically impossible.
3. Wages are barely rising.
The average worker’s wage is 2.5% higher than the same time last year. This means workers are getting paid marginally better, though not raking in major pay increases. It’s worth noting that the Federal Reserve expected an increase of 3.5%. Such a slow growth rate could cause them to halt their rate increases in the coming months.
4. More people are participating in the workforce.
Unemployment does not count for the millions of people who simply won’t participate in the workforce. If it did, the unemployment rate would be around 8.6%, as the traditional unemployment rate does not count for people not participating in the workforce. Fortunately, workforce participation is up to 62.8%, compared to last month’s figure of 62.7%. This means that able workers are increasingly looking for and finding jobs. At the same time, millions of Americans have given up on trying to find jobs and are thus not participating in the workforce.
5. No one knows what the future holds.
Job growth is nice and all, but likely unsustainable in the long term. There is such a thing as “peak jobs,” as the economy can’t keep adding new jobs forever. There’s also the issue of more tasks and positions being automated, which could lead to a decreasing number of new and existing jobs in the future. Analysts and economists have predictions ranging from best- to worst-case scenarios, and only future jobs reports will give us an idea on where the job market is heading.
What does this mean for you?
You probably have a better chance of finding a job now, especially if it’s a low paying one. Your wages also likely went up by a small amount over the last year. (If they didn’t, you might want to have a word with your boss.) Most importantly, the economy is slowly but surely growing. How long that growth can last is anyone’s guess, but it sure beats the alternative.