April 2018 marked the 91st consecutive month of employment gains. Since 2014, the average monthly job gain has steadily declined. While it may seem alarming, that is actually normal for a recovering economy.
The Bureau of Labor Statistics has officially announced the unemployment rate at 3.9 percent, following six months at 4.1 percent – this release suggests there are 6.3 million persons unemployed in the United States. The number of people who lost their job and/or completed temporary employment declined by 188,000 in April to 3 million.
According to new records, 14 states have set new record low unemployment rates over the past year. Those states, in order of lowest percentage, are: Hawaii (2.1 percent), North Dakota (2.5 percent), Colorado (2.6 percent), Idaho (2.9 percent), Maine (2.7 percent), Wisconsin (2.9 percent), Tennessee (3.3 percent), Arkansas (3.6 percent), Alabama (3.7 percent), Texas (3.9 percent), Kentucky (4 percent), Oregon (4.1 percent), California (4.3 percent), and Mississippi (4.5 percent). These results are significant and display the large gaps being filled.
What does this mean for our economy?
American businesses are continuing to find positions within their companies to expand payroll. Catherine Barrera, Chief Economist of the online job site ZipRecruiter told The NY Times, “We’ve continued to add jobs routinely every month for so long, and the unemployment rate we have reached is amazing.”
While the record low unemployment rate and growth is fantastic news, we’re not out of the woods. Employers are always seeking out ways to cut back on investments and hiring; therefore, it’s important to keep that notion in retrospect. The fluctuation of raw materials and other goods is a constant balancing act which changes on a daily basis. The Bureau of Labor’s report suggests that there are no changes within major industries such as construction and financial activities and overtime for the manufacturing industry has increased slightly.
How does the growth effect wages?
Most people would assume that low unemployment rates translate to larger paychecks because employers are seeking potential employees in a smaller pool of candidates; however, this theory has proven to be untrue. Wages have increased by 2.6 percent over the past year. While any increase is definitely a sign of hope, it’s important to understand how inflation effects raises and how it correlates to what our consumers are purchasing and consuming.
The longing question that Americans are trying to answer is, “How can employers continue to increase pay at a gradual pace, when the labor pool of candidates continues to become smaller?” Obviously, there is no definitive answer. Cutting down productivity is an option continuously mentioned, but many organizations do not agree. Barrera said, “People are creatures of habit. If you have been using a strategy that has been working for you for a number of years, you aren’t going to suddenly change it.”
Companies, big and small, will need to come together and strategize new techniques and theories to make brands last longer, produce a bigger return and still have room for gradual growth.
All in all, steady increases are a sign of growth and development in terms of the economy. Ultimately, low unemployment rates translate into sales which creates more money for continued growth and progress within the world.