Jobs Provide Foundation for Consumer Spending
Chart: The red line is initial claims for unemployment; the blue line is job openings.
Over the last week we’ve received a clearer picture of a labor market that remains healthy.
The U.S. economy has added almost 2.5 million people to payrolls over the 12 months through July. Over that time, the unemployment rate fell to 4.9 percent AND almost 2.2 million people entered the labor market. Those results appear to be finally pushing wage gains up at a somewhat faster pace. That’s good news for consumers.
Even better news is that after having added those nearly 2.5 million jobs, U.S. employers report more than 5.6 million job openings in June yet to be filled, according to data released this week from the Bureau of Labor Statistics. The good news on jobs is further supported by the historically low level of initial claims for unemployment insurance. Claims were just 266,000 in the latest weekly report, down from 267,000 in the prior week. The four-week average came in at 262,750.
Overall, the incoming flow of job market data suggest continued support for consumer spending, which has been the foundation of the current, thus far slow, economic expansion.
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Robert Hughes
Robert Hughes joined AIER in 2013 following more than 25 years in economic and financial markets research on Wall Street. Bob was formerly the head of Global Equity Strategy for Brown Brothers Harriman, where he developed equity investment strategy combining top-down macro analysis with bottom-up fundamentals. Prior to BBH, Bob was a Senior Equity Strategist for State Street Global Markets, Senior Economic Strategist with Prudential Equity Group and Senior Economist and Financial Markets Analyst for Citicorp Investment Services. Bob has a MA in economics from Fordham University and a BS in business from Lehigh University.
