Category Archives: hourly earnings

April Employment Situation Report Fall Short of Expectations

Posted on May 4, 2012 by admin

The Employment Situation report from the Bureau of Labor Statistics is one of the most, if not the most, anticipated economic reports each month.  And this month was a little bit of a disappointment for many economists and investors.  While the increase of 115,000 nonfarm payroll jobs is certainly better than a decrease, the April employment situation report is significantly short of the expected 165,000.  Unemployment dropping to 8.1% (from 8.2%) is much better than the rate increasing, but it is hardly enough to make a significant impact in the overall employment situation. Coming off months like February, where the nonfarm payroll grew by a revised 259,000, and March where that number grew by 154,000, the April numbers are nothing to get excited about.  But after such a big drop over the past several years, and such a deep recession, we can expect recovery to be slow.  Most people just wish it would finally pick back up quickly. Many of the sectors that were surveyed posted gains.  Private payrolls, goods producing, manufacturing and mining were all up at least some.  On the other hand construction and public payrolls were down.  At a time when construction should be picking up rapidly for the coming summer months this is concerning to some investors. Another area of concern is in hourly earnings.  March showed a .2% gain and analysts were expecting the same in April.  The actual number remained flat with no increase at all.  At the same time the average work week expectedly stayed the same at 34.5 hours.  During a period of increasing fuel prices a lack of earnings growth is disconcerting to many. The employment situation was better in February and March, and then it was revised to even better numbers.  The expectations were that April would post the same results, especially as spring is usually a time for economic growth.  Unfortunately the numbers were paltry, and while the small gain is good, it is nowhere near large enough to make a significant impact. Continue reading →

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US Average Hourly Earnings Decline in November

Posted on December 7, 2011 by admin

The average hourly earnings for private nonfarm payroll employees have decreased, according to a December 2, 2011 press release by the Bureau of Labor Statistics. The recent $23.20 average hourly earnings has decreased to $23.18.  The decrease of 2 cents per hour, or 0.1 percent of the rate, has come after a continuous gain of 1.8 percent over the last 12 months. The recent decrease in hourly wages after a steady increase over the last 12 months could indicate that growth in the economy has tapered off.  This slowing could result in a more stable and predictable economy.  If the months continue to show material fluctuation in hourly wages economists and consumers the economy may grow more confident about the economy. If consumers are less concerned regarding their own employment and ability to retain their own job, they may increase consumer and borrowing.  These changes, in turn, could motivate banks and private sector investment companies to lend and invest funds.  In fact, consumers spent record highs in terms of spending on Black Friday and Cyber Monday this year, a sign that more people are feeling comfortable with their economic position. However, if the next few months indicate a steady decrease in the average hourly earnings, consumers will likely be more concerned about their employment prospects and will feel less confident in spending. This decrease in confidence will likely lead to a decrease in overall economic activity. Investors and lending institutions would be less likely to loan or invest funds in an uncertain market.  Interest rates would likely rise to compensate for an increased risk of investment. Since the average hourly wages have decreased slightly, economists will continue to monitor this statistic to determine whether the economy has stabilized or if a decline in the economy is more likely to occur.  They will also look at other data to gauge the health of the economy, including the unemployment rate, inflation, value of the American dollar, and the consumer confidence level as determined by the amount of consumption that takes place over the upcoming holiday season. Continue reading →

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