Washington, D.C. — Center for American Progress Economist Michael Madowitz released the following statement today on the January 2016 employment situation figures from the U.S. Bureau of Labor Statistics. The unemployment rate dropped to 4.9 percent in January, down from 5 percent in December 2015.
The U.S. economy started 2016 strong, with 151,000 jobs added last month; January 2016 marks the 71st straight month of private-sector job growth for the U.S. economy. Although it has been an uneasy month for the financial markets, the more important measure is how Main Street is doing. The overall data show an economy that is improving by many measures—especially average hourly earnings, which jumped 0.5 percent—in spite of weaker corporate profits. If there is any silver lining to the instability on Wall Street, it is that it has put stock watchers on the same page as labor market watchers; both groups can now agree that the Federal Reserve needs to focus more on jobs and economic growth and worry less about inflation.
Thus far in the economic recovery, corporate profits have almost defied gravity. If what we are seeing reflects everyday Americans starting to share in a recovery that has otherwise eluded many of them, that is a positive sign, but profits falling without explanation would be considerably more concerning.
Related resource: The State of the U.S. Labor Market: Pre-February 2016 Jobs Release by Michael Madowitz, Danielle Corley, and Shiv Rawal
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