The U.S. jobs market is on fire. And not the “crumbling-into-a-smoldering-pile-of-ash” kind. We are experiencing a record-setting environment, and most Americans have no idea. Either they’re oblivious or so misinformed that they can’t appreciate it. There are currently over one million more job openings than there are unemployed people to fill them! “Help Wanted” signs can be seen in the windows of the majority of service businesses. Wages are starting to rise as employers feel the pressure to pay more in order to retain and attract qualified employees. Black and Hispanic unemployment is the lowest since the Department of Labor began tracking in the ’70s. The margin between minorities and white unemployment is also setting record lows.
1. “All the new jobs are low-paying.” This couldn’t be further from the truth. Most new jobs are in Education and Health Services, or Professional and Business Services, which pay in the $60-$70,000-per-year range. These two growing categories represent careers with long-term potential and growing demand.
2. “There are more jobs, but wages are flat.” I have heard this one asserted by the media for years, and it is flat-out wrong. Wage growth was flat from 2009-2014, but we have since seen very steady growth in real (after inflation) wage growth, including an accelerated increase since early 2018.
3. “Only the rich are doing better.” The lower half of income earners recently experienced a boom in wage growth while the higher earners saw a slowdown.
4. “Any wage gains are going toward the increased cost of healthcare and education.” Healthcare and education costs are a problem, but they are not stopping consumers from increasing their spending (personal outlays). Households are also saving at a much healthier rate than before the last recession.
We are living in an incredible employment picture that could go down as one of the best in history. A strong economy can provide the opportunity to request a raise, seek higher positions, pay down debts, and save more for retirement. Make the best of this time.
Any opinions are those of Brian Cochran and not necessarily those of Raymond James. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.