US Unemployment Officially At 49-Year Low
According to official figures from the US Department of Labor, the unemployment rate in the USA for April has fallen to 3.6%. This milestone marks the lowest official unemployment level in the USA since December 1969. Very few people who were in the work force in 1969 will still be working today since they’d be a minimum of 66 years old, if they were born in 1953 and therefore 16 in 1969. 1969 was the year of the Woodstock festival; the height of the Vietnam war (conscription, “the draft”, started in December 1969); and saw the first man on the moon (Neil Armstrong). Of course, the statistical basis of how it was determined if you were unemployed has been significantly tweaked since 1969!
The Labor Department reports that April saw the creation of 263000 jobs and the unemployment level ticked down from 3.8 to 3.6%.
Many economists believe that any figure of unemployment below 5% represents “full” employment and ought to trigger a degree of wage inflation. However, that assumption is based on a “true count” of unemployment. To be considered as unemployed, a person must be registered as unemployed and actively seeking work. This can lead to an underestimation of the true figures for those out of work and wishing to work.
Average wages are currently rising at a rate of 3.2% which is above the price inflation figure which currently stands at 1.9% (March 2019). In principle, this means that American consumers in work will have a little more disposable income. The job creation data was spread across most sectors of the US economy for April, indicative of a strong underlying economic performance (with respect to job creation, at least).
The assumption that the US economy is at full employment is challenged by the fact that the number of people working in part-time employment, but looking for full-time hours, stayed unchanged at 4.7 million. This represents a reserve of employees that businesses could tap before being forced to compete for workers by raising wages and improving employment conditions.