A muddled jobs picture: Employers keep hiring but workers feel stretched

Detailed summary

Last week’s seemingly reassuring employment report from the Bureau of Labor Statistics was both more and less than meets the eye.

Amid deepening economic uncertainty, businesses are snapping up workers at a faster than expected clip in fields including health care, manufacturing, transportation, warehousing, and professional services.

Another area of productive hiring might be soothsayers — smart prognosticators who can decipher the bewildering job market.

The news: Last week’s seemingly reassuring employment report from the Bureau of Labor Statistics was both more and less than meets the eye, a kind of Rorschach test of how you view the current economy.

Employers added 165,000 jobs in October — about 100,000 more than economists expected — as the US unemployment rate dipped to 4.1 percent from 4.2 percent in September. The data, on its face, points to a stable and growing American workforce.

“It really shows the resilience of the US economy,” says Gerald Friedman, emeritus economics professor at the University of Massachusetts Amherst.

Stretched thin: If you look below the headline numbers, however, wage growth edged up just 3.1 percent from a year earlier, well below the 4 percent rate of inflation. That suggests the purchasing power of American workers continues to shrink.

The jobs report, coupled with a Consumer Price Index report Tuesday showing that inflation remains elevated, fueled expectations that the Federal Reserve will boost interest rates again at its Dec. 9 meeting, making it more expensive to borrow money for purchases such as homes and cars.

Don Klepper-Smith, a veteran New England market watcher who’s chief economist for DataCore Partners, says the economic data are giving off more conflicting signals than at any time in the past 40 years.

“Consumers are stretched thin,” he says. “There’s not a lot of cash laying around at the end of the month. It’s all eaten up by high grocery prices, high energy prices, and tariffs.”

Opening of the article, excerpted from The Boston Globe. To read the rest, open the article on the publisher's site.