UNEMPLOYMENT AND WAGES - NOVEMBER 2016

This blog has been following the economy and has repeatedly found a disconnect between what politicians and the news media tell us (the economy is poor) and what the facts are (the economy is good and looks to get better).  There are other, more qualified analysts, who come to the same conclusion.

"The labor market feels very good," Mark Zandi, chief economist at Moody's Analytics, told CNBC. "Mr. Trump is inheriting a very strong economy." * 

The national unemployment rate fell to 4.6 percent in November, the Labor Department said Friday. 

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Every month on "Jobs Friday," the Bureau of Labor Statistics releases a bunch of data, each point of which provides its own unique perspective on an aspect of the nation's employment situation. Economists look past the official unemployment rate — that 4.6 percent figure, also known as the "U-3" rate — to other metrics that give their own nuanced view of jobs in the country.**

One of those figures is called the U-6 rate, which has a broader definition of unemployment than the U-3 does. In November, that figure fell two-tenths of a point, to 9.3 percent.**

(Click on figure to enlarge.  The figure in interactive in the refernece)

 U-3 is the  total unemployed  as a percentage of the total work force and is the official unemployment rate.   At 4.3 % the official rate has returned to the pre-Great Recession levels.

U-6 adds discouraged workers and marginally attached workers plus those working part-time for economic reasons. Unemployment rate for U-6 was 9.3 in November 2016, well below the high of 17.1% in late 2009-early 2010, but still above the average of 2006-2007 that was more like 8.2%.**

Wages continue their climb.  Average hourly wages were at $2.69/hr (red in fgure) up considerably from $2.17 in the June report  In the June report average weekly wages (blue in figure) were also $2.17 in June, the same as the average weekly wages, and similar at $2.28/hr in November.**

(Click on figure to enlarge. The figure is interactive in the reference)

Note that prior to the Great Recession, hourly wages hit a high of $3.66/hr and $3.86/hr for weekly wages.  At the depth of the Great Rececession, the figure for weekly wages had fallen to an increase of only $0.41/hr!  The pattern for hourly ages was quite different, in fact hitting a peak during the Great Recession before starting to decline near to the current values.

The climb in hourly wages relative to weekly wages suggests that the rise in hourly wages is a result of increase in lower skilled jobs.

* http://www.cnbc.com/2016/11/30/us-private-sector-jobs-nov-2016-adp.html 
** http://www.cnbc.com/2016/12/02/unemployment-rate-fell-but-a-more-realistic-rate-is-higher.html