Saturday, May 5, 2018
The U.S. economy has delivered steady if only modest gains for most Americans since the Great Recession ended in 2009. It’s been a frustration for many.
Yet the very sluggishness of the economic expansion helps explain why it’s now the second-longest on record and why more of the country might soon benefit from higher pay.
Nearly nine years into the recovery, the job market keeps delivering: The government said Friday that employers added 164,000 jobs in April – the 91st-straight month of hiring growth, the longest such streak on record. More tellingly, the unemployment rate fell to 3.9 percent, the lowest since December 2000. Eight years ago, the jobless rate was 10 percent.
But for much of the expansion, many people have felt left behind. Some have found only part-time work. Pay growth, on average, has been meager. The stock market boom and low interest rates that defined the recovery have favored the wealthy.
The economy’s modest growth, though, has helped prevent it from overheating and skidding into another recession, as often happened during more robust expansions. And some economists say the ever-lower unemployment rate suggests that a wider swath of Americans soon stand to benefit from stronger pay growth.
“It’s just not sustainable for average pay growth to be so low in a labor market this tight,” said Andrew Chamberlain, chief economist at the jobs site Glassdoor.
Average hourly earnings have risen 2.6 percent from a year ago. That is slightly more than the year-over-year wage growth of roughly 2 percent that prevailed in 2014 and 2015, when the unemployment rate was higher. Yet by historical standards, wage growth has been relatively stagnant.
Past expansions have delivered faster growth. But since World War II, they have lasted an average of less than five years before slipping into recession.