Unemployment Falls to Historic Lows
The unemployment rate edged down to 3.9 percent in April, the lowest level since December 2000. To put that into perspective, the top song in the U.S. that month was “Independent Woman, Pt 1” by Destiny’s Child, long before Beyoncé Knowles was known as “Queen Bey” or had a “Beyhive” with millions of followers! But I digress. According to the New York Times, “In the last 60 years, there has been only one sustained period where unemployment stayed below 4 percent: the late 1960s.”
One reason that the rate dropped was the labor force decreased by 236,000, shrinking the number of potential workers available. That’s not exactly the best reason for a slide, though much of the still-weak labor-force participation rate (62.8 percent in April) is due in large part to demographics. Those factors include Boomers’ retiring and younger people staying in school.
In addition to the headline rate dropping, so too did the broader unemployment rate (U-6), which includes the official rate; plus marginally attached workers (those who are neither working nor looking for work, but want a job and have looked for work recently); and people who are employed part-time, but want full time jobs. In April, U-6 fell to a 17-year low (July 2001) of 7.8 percent, down from 8 percent last month. More notably, U-6 stood at 8.4 percent in November 2007, a month before the recession started and peaked at 17.1 percent in early 2010.
April marked the 91st consecutive month of job gains, the longest streak of increases on record and during the month, there were 164,000 new positions. With positive revisions to the two previous months, the economy is averaging 191,000 over the past 12 months, for a total of 2.28 million jobs. For anyone keeping a tally, since bottoming out in 2010, the recovery has seen almost 17 million new jobs.
With all of these jobs, you might be wondering, “Where’s the wage pressure?” The answer: “Nobody really knows.” Wage growth had been trending up, although it has been moving sideways recently. In April, there was a 2.6 percent increase, which is enough for workers to stay ahead of inflation, but not exactly jaw-dropping. Back in December 2000, when the unemployment rate was at similar levels, annual hourly earnings were up by 4.2 percent.
College Graduation Alert: With the month of May comes a parade of college graduations and according to the not-for-profit National Association of Colleges and Employers (NACE) 2018 Salary Survey report, average starting salaries look good for the Class of 2018, regardless of field of study.
- Humanities: $56,688 (up 16.3 percent from 2017)
- Social sciences: $56,689 (up 6 percent)
- Business: $56,720 (up 3.5 percent)
- Math and science: $61,867 (up 4.2 percent)
- Engineering $66,521 (up less than 1 percent)
- Computer science: $66,005 (up less than 1 percent)