Washington, D.C. — Center for American Progress Economist Michael Madowitz released the following statement today on the October 2015 employment situation figures from the U.S. Bureau of Labor Statistics, or BLS. The BLS announced that last month, the economy added 271,000 jobs, and the unemployment rate dropped to 5.0 percent—both much stronger than markets expected.
October 2015 marked 68 consecutive months of job growth, and today’s jobs report from the BLS shows that the U.S. economy is improving steadily with plenty of room to grow. This strong month of job growth, coupled with a welcome uptick in wage growth, should be especially heartening to the many American workers still on the sidelines of the recovery. We should not read too much into one month of data; the pace of job growth this year remains healthy, but there are few indications of the kinds of wage pressure we would expect to lead to higher inflation.
Importantly, a closer look at the employment data shows that, contrary to popular belief, younger workers—from Gen Xers to Millennials—are playing a greater role in the economy’s turnaround, with the employment-to-population ratio finally coming back after the end of the recession. Building an inclusive economy—one that includes full participation by younger workers, older workers, working families, women, and people of color—should be at the heart of the nation’s public policies for the economy and the labor force. Americans should not have to win the boss lottery to get access to equal pay, paid sick days, and paid family leave or to be able to afford high-quality child care.
While the economic recovery continues to look strong, we should not let today’s numbers obscure that there is still considerable slack in the labor market, and there are no signs of the economy overheating. Inflation remains well below the Federal Reserve’s 2 percent stated target, and lots of workers, especially Americans in their 30s and 40s, are still on the sidelines. The Fed’s latest statement hinting at a rate hike in December has understandably caused some market confusion about the inconsistency between the Fed’s short-term intentions and its long-term commitment to a credible inflation target. This strong report amplifies that tension, as rate hikes appear more likely, even if they may be premature and likely to slow the economy in 2016.
Related resource: The State of the U.S. Labor Market: Pre-November 2015 Jobs Release by Michael Madowitz, Danielle Corley, and Shiv Rawal
For more information or to speak with an expert, contact Allison Preiss at gro.ssergorpnacirema@ssierpa or 202.478.6331.