A week ago, the U.S Labor Department indicated that hiring remains strong in America. Coming into last week’s data release, the median forecast of 100 economists surveyed by Bloomberg had projected that the nation added 215,000 in September, but the Labor Department estimates the actual number at 248,000. Moreover, estimates for two prior months were revised upward. Even more surprising was the decline in unemployment. Economists expected unemployment to stay at 6.1 percent in September. Instead, it fell to 5.9 percent, the first time in 6 years that America’s unemployment rate fell below 6 percent.
Still, there remains very little indication of serious wage inflation. Pay has risen just 2 percent in real terms over the past 12 months. Perhaps that’s because while unemployment has declined, underemployment remains elevated. The underemployment rate, a gauge that encompasses the unemployed, workers settling for part-time jobs and discouraged workers stood at 11.8 percent in September, or twice the official rate of unemployment.
