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Good news and bad news on jobs

Nancy Marshall-Genzer Nov 7, 2014

The Labor Department just released the  jobs report for October. It says the economy added 214,000 new jobs last month.

The unemployment rate fell to 5.8 percent, from 5.9 percent.

But there’s more to the jobs picture than just those numbers:

There’s a missing piece of the puzzle – and it’s wage growth.  Pay checks aren’t going up much.

Today’s jobs report showed average hourly earnings up by 3 cents last month.  Wages were flat in September. 

Part of the reason for that may be that there’s still some slack in the job market. 

Employers aren’t having to raise pay to attract workers.  They have plenty to choose from. 

“The fact that wages have not really moved suggests that there is a lot of slack and that employers are still holding all the cards,” says Elise Gould,  senior economist at the Economic Policy Institute. “There are still many workers out there for every job opening.”

The Federal Reserve is watching these numbers closely, as it tries to decide when to raise interest rates.

It’s not going to be in any rush to raise interest rates, as long as there’s still that slack in the labor market.

When we start to see the slack going away – when wages start going up more – then the Fed will start thinking it may be time to hike interest rates. 

Which, by the way, have hovered near zero for almost six years.

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