Amid a generally upbeat July employment report lurked some unwelcome news for working people: Gains in weekly incomes were the worst in nearly two years.
In inflation-adjusted terms, production and non-supervisory workers have seen a weekly raise of just 3 cents since March 2010, the month after employment hit bottom after the recession.
"It's not an economy that has a sign of momentum," said Diane Swonk, chief economist at asset-management firm Mesirow Financial in Chicago. "Hours worked are not heating up, and wages are stagnant."
The economy added 163,000 jobs in July, the government said Friday. That's a bit better than the average of 133,000 new monthly jobs since employment hit bottom in February 2010.
"The job market is still so loose, it's hard to ask for a raise," said PNC Financial senior economist Gus Faucher.
The income gains are comparable to past recoveries, according to government data.
Coming out of the 1982 recession, this group of workers, which includes nearly five of every six private-sector employees, got almost a $5 weekly raise in the first year of the jobs comeback. That's about $11.40 in today's money.
But most of that gain was lost by mid-1985, leaving just an inflation-adjusted $1.66 a week.
After the 1992 recession, workers got an inflation-adjusted 92-cent weekly raise by this time in the recovery, worth just under $2 a week now. After the 2001 downturn, inflation-adjusted wages had fallen by this stage of the recovery.
This time, workers posted gains in 2010, much as in 1983, but have lost nearly $4 a week in inflation-adjusted pay since October 2010.
Besides weak bargaining power, workers are having trouble cashing in because the biggest jobs gains are in industries with many low-wage workers, said Moody's Analytics economist Marisa Di Natale. Higher-paying fields aren't gaining that many jobs.
The weak wage growth threatens to derail the hoped-for virtuous cycle in which people see unemployment dropping, get more confident about the economy and begin spending, Di Natale said. Moody's, while expecting job growth to keep close to its current pace, doesn't expect inflation-adjusted wages to rise before late next year.
Most Popular Stories
- Consumer Spending Will Offset Sequester: Economists
- Hispanic Grads Pass Their Peers in College Enrollment
- AT&T Seeks to Fill 120 Jobs in South Carolina
- Gas Prices Expected to Stay High
- California Considers Oil Tax to Fund Schools
- Dude! California Beach Parking Plan Making Waves
- Ford's Supplier Diversity Program Turns 35
- Yahoo to Pay $1.1 Billion for Tumblr
- NTSB Wants to Lower Blood Alcohol Limit to 0.05
- Boise Terror Suspect Pleads Not Guilty