STATEMENT: CAP Economist Michael Madowitz on July 2016 Jobs Report
Washington, D.C. — Center for American Progress Economist Michael Madowitz released the following statement today on the July 2016 employment situation figures from the U.S. Bureau of Labor Statistics, or BLS. The economy added 255,000 jobs, and the unemployment rate remained steady at 4.9 percent.
Today’s jobs report is another signal that expansion in the economy remains strong. Even though employment growth has slowed relative to the past three years, it is still quite healthy, as indicated by the low unemployment rate and average earnings growth of 2.6 percent over the past year. Very low inflation—the Federal Reserve’s preferred core PCE measure was just 1.6 percent through June—means much of these gains are coming in the form of higher real wages. The quiet story of the last year continues to be low inflation and a sustained uptick in earnings growth, giving our economy the kind of significant real wage growth we see in a healthy expansion.
The past few months have been a reminder that significant risks to the economy remain and that even with impressive job gains, employment growth has had little pressure on prices. A key reason for this is the broader picture of the labor market, which shows considerable slack in groups less represented among monetary policymakers—such as workers with less than a college degree or people of color. The Fed wisely recognized this fact in its Federal Open Market Committee meeting last week, opting to leave rates unchanged—as most Fed watchers expect it to do through at least the election, when the rate hike debate can happen in a less political environment. If we continue to see jobs reports like these, there is no reason to slow this healthy recovery down.
Related resource: The State of the U.S. Labor Market: Pre-August 2016 Jobs Release by Michael Madowitz, Juliana Vigorito, and Annie McGrew
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