The U.S. unemployment rate sank to a six-year low of 5.8 percent in October, and employers added 214,000 payroll jobs, the ninth straight month of 200,000-plus net job growth.
Those are undeniable improvements compared with the 10 percent jobless peak and job losses in the pit of what became known as the Great Recession.
So where’s the joy?
Polling before and after Election Day found profound disappointment in the national economy and a sense that the U.S. Bureau of Labor Statistics’ monthly numbers aren’t the best barometer of economic satisfaction.
“Tuesday night showed these monthly unemployment announcements have long since failed to impress the American people,” said Ron Lazof, chief executive of Behr Processing and a member of the Job Creators Network, an organization of business owners.
In other words, months of job growth and shrinking joblessness haven’t sparked mass optimism about the economy.
“It’s because of no wage growth,” said Dan Heckman, national investment consultant in Kansas City for U.S. Bank Wealth Management. “Wages are stagnant, and only recently has there been relief on the consumer price side when gasoline prices finally came down.”
The October jobs report said average hourly earnings rose 2 percent over the last 12 months.
“The quality of jobs remains a question,” said Mark Hamrick, Washington bureau chief for Bankrate.com. “A 2 percent increase in average wages will not fund a college education or retirement savings.”
Job growth in October, as in many recent months, was stronger in temporary help and the low-wage retail and food service sectors than in top-paying professional jobs. That affects the vast majority of Americans who are working or looking for work.
“Sufficient slack hasn’t been wrung out of the job market to the point where employers are having to pay up to hire employees or keep the ones they have,” Hamrick said.
The Labor Department’s monthly jobs report indicated there are 9 million people looking for work, down by 1.2 million from the beginning of 2014.
The number of long-term unemployed, who have been actively job hunting for at least 27 weeks, was estimated at 2.9 million, down by 1.1 million over the last 12 months. That’s a key indicator because the longer someone is out of work, the harder it is to become re-employed.
Beyond the headline employment and unemployment numbers, economists see consumer angst reflected in the relatively low level of labor force participation among adults 16 and older. Only 62.8 percent of the working-age population was working or looking for work in October, a rate that has been flat most of this year and that remains the lowest since 1978.
Analysts also read disillusionment in the number of people who are involuntarily working part time because their hours were cut or because they couldn’t get a full-time job. That number was unchanged in October at 7 million.
And there’s indication of flagging sentiment in the number of “discouraged” workers who say they have dropped out of their job searches. That tally produces the highest measure of unemployment — 11.5 percent last month, compared with the official rate of 5.8 percent.
“Economists are now debating how much of the sharp declines in labor force participation and in the share of the population with a job reflects reversible ‘slack’ and how much reflects the normal retirement patterns of an aging population,” said Chad Stone, chief economist at the Center on Budget and Policy Priorities, referring to the large baby boom generation.
Another big issue for workers is the quality of job growth. Although there were job gains in health care, professional and business services, and manufacturing, there also was sizable October hiring in food service and drinking places, retail trade and temporary employment.
The continuing post-recession surge in low-wage job creation may have fueled some November election results in which voters in states and cities around the country passed minimum wage increases.
“Economic insecurity doesn’t care whether you’re a Democrat or Republican, and that’s why voters in conservative strongholds such as Alaska, Arkansas, Nebraska and South Dakota all voted by wide margins to raise wages for their lowest wage earners,” said Christine Owens, executive director of the National Employment Law Project, which advocates for minimum wage increases.
For the time being, though, “the improvements in employment have not generated much improvement in the purchasing power of workers’ wages,” said Gary Burtless, a senior fellow at Brookings.
The 2 percent average wage gain “is astonishingly small given the steady increase in employers’ appetite for workers,” Burtless said. “So far, a gradually tightening job market has not produced much, if any, improvement in employees’ pay envelopes (and) labor’s bargaining power remains feeble.”
In short, consumer spending — a strong indicator of consumer sentiment about economic health — still falls short.
Scott Anderson, chief economist at Bank of the West, likened an uptick in consumer spending to the elusive white whale chased by Captain Ahab in “Moby-Dick.” He said economists are still looking for the pro-growth indicator “that would signal to the Federal Reserve that it’s OK to normalize interest rates and to others that it’s OK to come out of our bunkers. … In short, we may have spotted our white whale” — but haven’t caught it yet.