As the unemployment rate drops and other aspects of the job market remain solid, one weakness continues to stand out: the lack of wage growth.
Average hourly earnings actually edged lower in October with weekly wages down 35 cents from September. On an annualized basis, hourly earnings are up just 2.4 percent — a pace barely above the 2.2 percent rise in the consumer price index.
So while the nonfarm payrolls gain of 261,000 was well above September's meager 18,000 and the unemployment rate fell to a 17-year low of 4.1 percent, the relatively weak growth in worker paychecks continued to raise concern.
"Companies have not been aggressive in raising wages. They have kept wages fairly stable, even for professional workers," said Quincy Krosby, chief market strategist at Prudential Financial. "What has to happen is an economy that jumps into the 3, 4, 5 percent growth category and where there is a severe shortage of workers, where companies have to compete for professionals workers, construction workers, manufacturing. We're not there yet."
The economy in 2017 has created an average 148,000 jobs a month, the slowest in at least six years. That's due at least in good part to a tighter labor market that is close to full employment and not able to crank out jobs the way it had in previous years during the recovery.