After painstaking growth, complaints of padded figures, and fears of underemployment among those lucky enough to have jobs, America finally sees its national unemployment rates in the 5.2-5.5% range. At this level, the Federal Reserve considers the market to represent full employment, with very nearly all of those actively desiring employment working or reasonably able to find work. An added bonus for government forecasters is that this rate of improvement is in keeping with their predictions, but comes a full quarter early.

This level of employment also represents momentum. A quarter million jobs (240,000) were added in the month of September, says the Department of Labor. This level of increase is the most the nation has seen since early summer. Steady and significant growth of this kind is surely a welcome sign for a nation that saw over 10% unemployment just five years ago. The job market saw 423,000 jobs added in the months of July and August combined. The jobless rate is now the lowest that has been seen since the middle of 2008, when the full force of the Recession had not yet hit American employment.

Whether or not the growth will be considered robust enough for the Federal Reserve to pull out increased short term interest rates has yet to be seen, as they have been kept nearly non-existent so as not to stifle potential rebound. If the present growth is sustained well into next year, the Fed has reported a possible rate increase by the middle of the year. Growth has been limited to roughly 2% for every month of the past several years, but recent trends indicate numbers nearer 3-5%.

Construction, retail, business/professional, and healthcare all saw 5 figure increases. While numerous market analysts and finance blogs tout these figures, not every side of the story is as encouraging as this. Wages remain virtually stagnant. Almost nowhere were workers expected to see more than 2% more pay than the same time a year before.

While all of this sounds encouraging, fewer American adults choose to participate in the labor force than at any point in the past 30 years. By the end of September, the level was 62.7%. This number represents a significant change in the composition of the labor market. Some analysts point to the steady elimination of many job sectors, with more automated to extinction every year. Elon Musk’s recent announcement that the new Tesla D will be able to drive itself, automatically, “90% of the time” is an example of the sort of revolution that, while making certain activities more convenient, will make some careers (like delivery and transport) close to irrelevant. Whether, and how quickly, these sorts of changes will be implemented in society at large is yet to be seen. For now, the growth in employment numbers is certainly encouraging.

By Boris Dzhingarov

© 2014 Copyright Boris Dzhingarov - All Rights Reserved

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