Wages Rise as U.S. Unemployment Rate Falls Below 5%
By NELSON D. SCHWARTZFEB. 5, 2016
Is the American worker finally getting a raise?
After years of scant real gains despite steadily falling unemployment and healthy hiring, wages picked up significantly last month, a sign the job market could be tightening enough to force companies to pay more to attract and retain employees.
The half a percentage point increase in average hourly earnings in January was the brightest spot in a generally positive Labor Department report on Friday, which showed job creation slowing from the white-hot pace of late 2015 even as the unemployment rate fell to an eight-year low of 4.9 percent.
The last six months were the best extended period for employee paychecks since the recovery began six-and-a-half years ago.
“That gain in average hourly earnings is significant,” said Diane Swonk, an independent economist in Chicago. Sustained increases are still needed to make up for years of stagnation, she added, “but it’s a move in the right direction, and that’s reassuring.”
Economists also said that the new figures suggested that the American economy was holding up well despite a slowdown in China, growing risks in emerging markets and turmoil in the stock market.
