WASHINGTON (AP) – Eight years after the Great Recession ended, the economy is steadily churning out jobs, and the unemployment rate is at a 16-year low.
Yet for most Americans, a key measure of economic health – pay growth – still lags behind pre-recession norms.
That isn’t likely to change Friday, when the Labor Department will release the U.S. jobs report for June. Economists have forecast that employers added a solid 177,000 jobs last month and that the unemployment rate remained 4.3 percent, the lowest level since 2001. The job market, in other words, has proved itself resilient.
Pay raises are another story, and a puzzling one. Analysts expect Friday’s report to show that average hourly wages rose just 2.6 percent from a year earlier, according to data provider FactSet. That’s well below the 3 percent to 3.5 percent average pay raises that have been typical in a healthy economy.
The Federal Reserve monitors the barometers of wage growth for any evidence that inflation might be starting to pick up. Inflation has remained persistently low since the recession ended – lower even than the Fed’s 2 percent target rate, which it regards as consistent with a healthy economy.