More Jobs and Higher Wages Draw People back into Workforce
The January Jobs Report was issued today, and it was all good news. 257k new jobs were added in January, and the November and December Jobs Reports were revised upward to add 147k jobs. This brought the 2014 job total up to nearly 3.1 million, with one more revision of the December report to come. On top of that, average wages increased 12 cents an hour, the largest monthly increase since June 2007. The U-3 unemployment rate ticked up to 5.7%, for the good reason that job vacancies and higher wages are drawing people back into the workforce as the participation rate increased from 62.7% to 62.9%. This is all great for people who need jobs or whose wages have been stagnating since the nineties. As we know from the Clinton boom years, the trick to getting real wage increases is to get back to a full employment economy in which employers have to raise wages to get the workers they need in a tight labor market.