2015 was a year of solid economic growth. With the release of the December jobs report, here are 10 things you should know about the labor market:
1. With an increase of 292,000 private sector jobs in December, we have now averaged job growth of over 200,000 per month for two straight years. This is the first time we’ve had back-to-back years of average monthly job growth of over 200,000 since the late 1990s.
2. We have now added 14.1 million private sector jobs over 70 consecutive months. This is the longest streak of private-sector job growth on record.
3. The unemployment rate now stands at 5.0 percent, down from 10.0 percent in the fall of 2009 and 5.6 percent a year ago.
4. The improvement in the unemployment rate over the last year has primarily been due to people getting jobs − not dropping out of the labor force − as the labor force participation rate held roughly steady over the last year.
5. We want to see unemployment drop further, but we are strongly beating expectations for the pace of improvement. As recently as early 2014, blue-chip forecasters were expecting the unemployment rate to remain above 5 percent until at least 2020, but we’ve now been at 5.0 percent for 3 months.
6. Underemployment is down significantly. There are now 764,000 fewer workers working part-time who want full-time jobs than there were a year ago. There is still room for improvement, but we’re headed solidly in the right direction.
7. Long-term unemployment has also dropped dramatically, declining by 687,000 in 2015 alone. In the spring of 2010, 45.5 percent of the unemployed had been out of work for more than six months – today it’s 26.3 percent. That’s still too high, but the progress is substantial.
8. The labor market is now strongly adding middle- and high-wage jobs. This is a shift. In the first few years of the recovery, we were disproportionately adding low-wage jobs. But over the last two years, as the labor market has strengthened, the pattern of strong growth in very low-wage jobs has shifted to a pattern of strong growth in middle- and high-wage jobs.
9. During the first half of 2009, over 600,000 laid-off workers were applying for Unemployment Insurance benefits every week. Now, initial UI claims have been at or under 300,000 for 44 consecutive weeks – for the first time since 1973.
10. Wages in December grew 2.5 percent year-over-year. Given extremely low inflation, that means real wage growth in 2015 was around 2.1 percent. That is positive news, but we can do better − particularly in light of the fact that that growth is coming on the heels of four decades of stagnant real wage growth for most workers (with the exception being the late 1990s, when the unemployment rate got down to 4.0 percent). That is why we are supporting actions like increasing in the minimum wage, strengthening overtime pay protections, and making it easier for workers to organize and join unions.
Dr. Heidi Shierholz is the Labor Department’s chief economist.