U.S. employers added a solid 178,000 jobs in November, reflecting the steady economy President-elect Donald Trump will inherit. And the unemployment rate hit a nine-year low of 4.6 percent, though mainly because many people stopped looking for jobs and were no longer counted as unemployed.
Average hourly pay slipped after a solid gain the previous month. Pay has increased at only a modest pace in the past year.
The report’s mixed signals illustrate the challenges facing Trump: Steady job gains and a low unemployment rate suggest that the economy is healthy. But weak pay increases and fewer Americans working or looking for work point to longer-term challenges.
Fewer than 60 percent of adults have jobs — 3 percentage points lower than when the Great Recession began in late 2007. In part, that trend reflects retirements by the nation’s many baby boomers. But it also means hiring hasn’t kept up with population growth.
Seven years into the recovery, pay growth is still below healthy levels. And the number of part-time workers who would like full-time jobs is 28 percent higher than before the recession.
Many of these trends — particularly the drop in the proportion of adults with jobs — emerged years before Obama took office. Trump’s challenge will be to try to reverse them.
He may get some help from the economy’s upswing: As employers continue hiring amid low unemployment, they will likely be forced to offer higher pay. Thicker paychecks, in turn, may draw more people who aren’t either working or seeking a job to begin looking again. And businesses may offer more hours to their part-time workers.
There is evidence — such as last month’s solid wage gain — that these trends have begun to take hold, though progress has been slow.
Still, nearly every economic report since the election has pointed to accelerating growth – key reason why the Federal Reserve is considered certain to raise short-term interest rates at its next meeting later this month.
Americans bought homes in October at the fastest pace in nearly a decade. Their willingness to make such a major purchase reflects growing optimism. In fact, according to the Conference Board, Americans are more confident in the economy than at any other point in the past nine years.
They are spending more, too. Solid consumer spending helped propel growth to a 3.2 percent annual rate in the July-September quarter, the best showing in two years.
By one measure, nationwide home prices have fully recovered and are even slightly above the level they reached in 2006, before the housing bubble burst.
That steady rise in home prices has boosted Americans’ household wealth and helped lift their overall finances. And even as consumers are spending more, pay is rising enough to enable more savings: Americans saved 6 percent of their after-tax income in October, up from 5.7 percent in September.
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