Are you still searching for a job? Well, the good news is that it is summertime! And like Will Smith said, it’s “time to sit back and unwind.”
Go ahead and let your hair down. In fact, go hang out this weekend. Go to the club and have a few drinks. Also, get on the dance floor and dance until your feet hurt, your hair falls, and your back is soak and wet. According to the U.S. Bureau of Labor Statistics’ monthly jobs report, the economy gained 280,000 jobs in May. In addition, jobless claims are the lowest since 2000 with only 264,000 Americans filing for unemployment.
It’s a strong report, stronger than we had expected," Jesse Hurwitz, a senior economist at Barclays, told CNN Money. "The U.S. labor market strength remains very much in tact (sic).”
In other words, those who are unemployed or interested in looking for a new job can finally relax a bit. The bad news, however, is that the U.S. economy still has “around 550,000 fewer full-time workers than it did before the recession started at the end of 2007,” says The Wall Street Journal. As a matter of fact, the BLS data does not include those Americans who are considered “underemployed” or working part-time jobs.
The point here is that the May jobs report will influence how many great weekends you will have this summer, despite your current status. So, the real question is: What will be your summer theme song in 2015, according to the experts?
School’s Out - Alice Cooper
If you are 25 and under, there’s no doubt that “School’s Out” for the summer! Now is the time to earn and save some money. According to the BLS, 96 percent of the people in this age group were among the 397,000 increase in the labor force in May, which includes those searching for a job as well as those who already have one. According to MarketWatch’s international commentary editor Rex Nutting, the 25 and under population also made up 76 percent of the 272,000 surge in employment. And the big winners were young women who occupied over half of the jobs created, Nutting adds.
That’s great news — if it can be sustained,” writes Nutting. “It means more families will get a start, pay off their student loans, and buy a house and a car.”
But for those ages 25 to 54, it will be Bananarama’s “Cruel Summer” if they don’t get back to work. People in this age group or “prime-age workers,” according to The Wall Street Journal’s analysis of the jobs report, have lower workforce participation rates than before the recession.
Surfin’ U.S.A. - The Beach Boys
If you are thinking about quitting your job, the summer of 2015 will be the best time to do it, the experts say. According to the BLS, over 2.8 million people quit their jobs in March. This means that U.S. workers were more secure that they would be able to find another one during the long summer months, says Christine Romans, CNN’s chief business correspondent.
And the May jobs report did not disappoint in turns of the types of job that experienced significant growth. Luke Tilley, chief economist at Wilmington Trust Investment Advisors in Delaware, told CNN Money that there’s significant growth in the service sector which has already beat its numbers from 2014. In addition, jobs in the healthcare industry increased by 47,000, while the business sectors like marketing and accounting increased by 63,000 jobs.
However, it’s the wages that are not playing catch up with the rest of the U.S. economy.
Summertime Blues - Eddie Cochran
According to the BLS, U.S. wages or the average hourly earnings of U.S. workers barely moved from last year to only 2.3 percent in May. This can be attributed to the “underemployed” Americans who are now getting jobs and “pushing wages down, as well as the threat of overseas competition,” says CBS Moneywatch reporter Aimee Picchi.
The ranks of the underemployed have created an unseen labor pool, given that these workers – many of whom are working part-time but want to have full-time jobs – aren’t included in the unemployment rate,” Picchi writes.
Wages are starting to move, especially with the minimum wage increases in some U.S. cities, but not as quickly as before the recession; and it’s not what experts would like to see in terms of significant growth, says Picchi. During the first quarter, wages and salaries increased 2.6 percent compared with 2014, according to the BLS. However, that is lower than what’s considered a "normal" rate of 3 to 4 percent, says Picchi. In addition, median household income has a long way to go before it gets back to those pre-recession levels. According to the BLS, the April median household income was $54,578, or almost 3 percent below the median of $56,207, the month the recession started, as reported by Picchi.
At the same time, costs of everything from rent to food has continued to climb, meaning that many households are earning less than they were seven years ago, but paying more to keep their standard of living,” says Picchi. “In about two-thirds of 33 cities studied by the Journal, wage growth has lagged rates seen before the recession, even though unemployment has continued to decline.”
According to Romans, before the recession, wage growth was close to 4 percent. And that’s why most experts are now dispelling the long-held theory that “when a labor market tightens, wages will rise as employers compete for workers.” But the proof is in the numbers and May’s numbers still reached the highest level in nearly two years. And an increase in wages shows that the U.S. economy is able and ready to support the labor force.
May’s job gains are a good omen for wage growth,” says CNN Money reporter, Patrick Gillespie. “Many experts say that pay should pick up as it gets harder and harder to find workers.”
So, by the end of the summer, you may be singing Rihanna’s “Bitch Better Have My Money” about your new employer.