Jobs Friday: Chillaxing Edition Happy Jobs Friday! The economy is still adding jobs, unemployment remains low, and wage growth is fine. It's all good...right?
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Jobs Friday: Chillaxing Edition

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Jobs Friday: Chillaxing Edition

Jobs Friday: Chillaxing Edition

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CARDIFF GARCIA, HOST:

Hey, everyone. It's Cardiff and Stacey. Thank you so much for listening to THE INDICATOR FROM PLANET MONEY. We would like to better understand who is listening and how you are using podcasts.

STACEY VANEK SMITH, HOST:

So please help us out by completing a short anonymous survey at npr.org/podcastsurvey - one word. It takes less than 10 minutes. It really helps support the show. That's npr.org/podcastsurvey. And now to today's episode.

GARCIA: And today's episode is...

VANEK SMITH: Oh, yes it is.

(SOUNDBITE OF AIR HORN

VANEK SMITH: Jobs Friday.

GARCIA: Job Friday.

VANEK SMITH: Jobs Friday, woo.

GARCIA: Welcome to a special everyone-chillax edition of Jobs Friday.

VANEK SMITH: Smooth jazz Jobs Friday.

GARCIA: Oh, yeah.

VANEK SMITH: Yes Because normally on Jobs Friday, we go through this whole spiel about, you know, don't get caught up in the monthly fluctuations. They move around a lot. The numbers get revised, et cetera, et cetera.

Instead, you know, here at THE INDICATOR, we like to look at longer-term trends, see what's really going on in the labor market, really look under the hood. But today's jobs report, which is the jobs report for the month of March, you know, had us a little bit stressed out. This was an important jobs report.

GARCIA: Yeah, it really was because, see, in January, 312,000 jobs were created.

VANEK SMITH: A lot of jobs.

GARCIA: That's a big - that's a monster number and also kind of a suspicious number because then in February, only 33,000 jobs were created. So it's hard to know which month was a better reflection of what was really happening in the economy.

VANEK SMITH: Or if, like, things were starting to really go downhill.

GARCIA: Exactly. And today's jobs report was the one that tipped the balance and gave us a bit of clarity. So we're going to actually go through just briefly the March jobs report. And we're also going to cover a couple of the longer-term trends as well because that is what we do here. And heading into the break, you can enjoy this chillax version of the air horn.

(SOUNDBITE OF AIR HORN)

GARCIA: That's not chillaxing (ph) at all.

(SOUNDBITE OF AIR HORN)

GARCIA: The air horn is kind of the antithesis of chillaxing, I think.

VANEK SMITH: I feel like I want to go play shuffleboard.

GARCIA: (Laughter).

(SOUNDBITE OF MONTAGE)

UNIDENTIFIED REPORTER #1: Let's just talk about the payroll report. To begin with, It looks solid. It looks like a bounce back.

UNIDENTIFIED REPORTER #2: Chill out, Wall Street. Everything's back to normal - 196,000...

UNIDENTIFIED REPORTER #3: Perfect number, I think, for equity markets in the sense that it was solid job gains but not too strong.

UNIDENTIFIED REPORTER #4: I think this is a perfect report for the Fed because it actually corroborates what they've been saying all along, which is...

UNIDENTIFIED REPORTER #5: Exactly, you couldn't order up better numbers.

UNIDENTIFIED REPORTER #6: This is kind of a Goldilocks report.

(SOUNDBITE OF MUSIC)

VANEK SMITH: So here we go. The U.S. economy created 196,000 jobs in March, and that is today's PLANET MONEY indicator. And we are happy. That is a healthy indicator.

GARCIA: Yes, it is - a relief.

VANEK SMITH: And it does come as a relief after the economy created so few jobs in February. And everyone was freaking out that this was the beginning of the end. Also in this report, wage growth looked good. In the past year, average wages have grown about 3.2 percent, which is a better looking trend than we've seen in the past few years.

GARCIA: Yeah. And the unemployment rate held steady at 3.8 percent, which is a low unemployment rate. In other words, take it all in, and the March report mostly confirmed that the labor market for now is still humming right along.

GARCIA: Smoothly.

GARCIA: Yeah. So much, by the way, for the March jobs report, we're done. That's it. See? Let's get to the longer-term stuff...

VANEK SMITH: (Laughter).

GARCIA: ...The stuff that matters, the stuff that you come to us for.

VANEK SMITH: So the first couple trends we want to highlight are brought to us by Martha Gimbel, friend of the show and the economic research director at the Indeed Hiring Lab. And here is what Martha had to say.

MARTHA GIMBEL: Right now, job growth is faster in middle and high-wage industries. Those are industries like air transportation, residential building, legal services, hospitals. But wage growth is faster in low-wage industries like child daycare services or food and drinking establishments.

That's really exciting for workers. An economy in which wage growth is speeding up in low-wage industries and employment opportunities are opening up a middle and high-wage industries is an economy that is good for workers.

GARCIA: These are both really welcome trends, so they are worth emphasizing again individually. Martha is saying that the industries creating jobs at the highest rate are the industries that pay a lot. That's excellent. That's where you want there to be more and more jobs. And then second, Martha has found that of the jobs that already exist, the biggest raises are going to the workers that need raises the most, workers in low-wage industries. And that unambiguously is awesome.

VANEK SMITH: Now for a somewhat less awesome trend, and this one is quite straightforward. The economy is creating fewer jobs every month than it was last year. So last year, the economy created more than 220,000 jobs a month. So far this year, the pace has slowed to 180,000 jobs a month. And, you know, that is not a bad number. It's a really solid number. It is just not as good as it used to be.

GARCIA: And hey, maybe it'll bounce back. The year is only three months old. But what is interesting about the slowdown is that we can't be sure exactly what is causing it. See, last year, the U.S. economy grew at a pretty fast pace, but it is expected to grow at a slower pace this year.

And that expectation of slower economic growth could be part of why fewer jobs are being created each month. Because if companies don't think the economy is going to grow very fast, they won't hire as many people to make their products.

VANEK SMITH: Or it could be that fewer jobs are being created every month simply because so much progress has already been made. There are fewer workers out there willing to take jobs than there used to be. You know, that is what you would eventually expect to happen after a long stretch of job growth because so many workers have already taken jobs. Or, you know, it could be a bit of both.

GARCIA: Yeah, and we'll know more as the year goes on. But the answer really does matter because even though the labor market has improved a lot in the past couple of years, in some ways, it is still not as strong as it was before the financial crisis more than 10 years ago. So just take one example. If you look at all the people in their prime working years between the ages of 25 and 54, a smaller share of these people have jobs than before the crisis. That is still the case.

Plus, even though wages are growing faster than they were a couple of years ago, they still are not growing as fast as they were in the mid-2000s. And what we would hope to see is that the labor market at least gets back to that earlier health, that earlier strength before it stops improving.

VANEK SMITH: But, you know, at least for now, everyone can breathe easy after the jobs day scare in February. It looks like the labor market is humming right along, though maybe humming a slightly softer, slower tune than it was last year. But, you know, at least the jobs that are opening up are in industries that pay well. And the industries that don't pay very well have actually started to pay workers a little bit better. In short, things have been getting better for workers.

(SOUNDBITE OF MUSIC)

VANEK SMITH: This episode was produced by Darius Rafieyan and edited by Paddy Hirsch. Our intern and fact-checker is Willa Rubin. And THE INDICATOR is a production of NPR.

GARCIA: And before we let you go for the weekend, a quick note that next Thursday in Washington, D.C., at a live event hosted by our friends at the Financial Times and the excellent blog FT Alphaville. I am going to be recording a discussion with Caroline Freund of the World Bank and Chad Bown of the Peterson Institute for an episode of THE INDICATOR.

And then on a separate panel, the Financial Times Alphachat podcast - which is great, you should subscribe - is going to be recording another discussion with Raghu Rajan, the former head of the Reserve Bank of India. That will be moderated by Brendan Greeley.

Space for this event is kind of limited, but if you'd like to try to attend, please email events.ftalphaville@ft.com. The Alphaville there is with a P-H. That's events.ftalphaville@ft.com Have a great weekend.

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