Median U.S. Household Income Slows As U.S. Job Openings Cool
Median income was $63,179, essentially flat from a year earlier after three years of increases. Median U.S. Household Income Slows As U.S. Job Openings Cool (#GotBitcoin?)
American incomes remained essentially flat in 2018 after three straight years of growth, according to Census Bureau figures released Tuesday that offer a broad look at U.S. households’ financial well-being.
Median household income was $63,179 in 2018, not statistically different from the 2017 median based on figures adjusted for inflation. The poverty rate in 2018 was 11.8%, a decrease of a half percentage point from 2017, marking the fourth consecutive annual decline in the national poverty rate. It was the first time the official poverty rate fell significantly below its level at the start of the recession in 2007.
The share of Americans who lack health insurance rose for the first time in about a decade, according to the figures. In 2018, 8.5% of people, or 27.5 million, didn’t have health insurance at any point during the year, compared with 7.9% of people, or 25.6 million, the previous year. That reversal comes years after the 2010 Affordable Care Act expanded insurance coverage to millions of Americans.
The figures will be closely watched for new insights into how the economy fared in 2018. In recent weeks, the government has revised downward its estimates for job gains, economic output and corporate profits at various points in time since early last year. Previous government surveys had suggested income growth picked up last year, though the census figures are considered more reliable because of the quality and scope of the data.
Income growth over the past decade hasn’t been as strong as some economists have expected given that the 10-year economic expansion has created one of the tightest labor markets in recent history. The unemployment rate hovered at or below 4% last year.
Part of the reason is employers have become more adept at holding down wages by using technology, and consolidation in industries such as telecommunications and banking also has damped income growth, said Carl Tannenbaum, chief economist for Northern Trust. The share of workers who are in unions, which push for worker pay raises, also continues to decline steadily.
U.S. Job Openings Cool In Slowing Labor Market
A pullback in openings aligns with other labor-market signals pointing to a slowdown.
The number of job openings decreased in July from a year earlier for the second consecutive month, underscoring slowing demand for new workers, though opportunities remain plentiful for job seekers.
Job postings fell 3% from a year earlier in July to 7.217 million after declining 2% in June, the Labor Department reported Tuesday. Before June, job openings hadn’t decreased year over year since early 2017.
“If this downturn is a longer trend it could be quite worrying,” said Julia Pollak, labor economist at employment site ZipRecruiter. “It shows that demand for labor is falling.”
Openings peaked at 7.6 million in November and have decreased by about 400,000 since then.
Still, the number of available jobs remains high. Job openings exceeded the number of unemployed Americans by 1.2 million in July, the 17th straight month openings have outnumbered job seekers.
Employees are taking note: The rate at which workers quit their jobs ticked up to 2.4% in July after holding steady at 2.3% for 13 straight months, a sign of worker confidence in the job market.
More Americans leaving their jobs also bodes well for wage growth, as workers gain bargaining power when they move from one job to another. Year-over-year growth in average hourly earnings has been above 3% for more than a year after lagging for much of the economic expansion.
As long as openings exceed available workers, employees hold a fair amount of leverage, said Nick Bunker, Indeed Hiring Lab economist.
“If we do continue to see a significant slowdown in employer demand, we’re going to be less likely to see these pickups in job hopping,” he said.
“In the future, such an increase might be even less frequent if employer demand continues to stagnate. The labor market remains strong, but signs point to it slowing to where job seekers may lose out on some opportunities,” said Nick Bunker, Indeed Hiring Lab economist, in a note.
A pullback in openings aligns with other labor-market signals pointing to a slowdown, such as hiring. The U.S. economy added an average of 156,000 new jobs a month over the past three. That was down from average growth of 190,000 a month for the eight years since employment started picking up after the last recession.
The unemployment rate, at 3.7%, is historically low, but little changed from 3.8% a year earlier. Between 2010 and 2018, by contrast, it fell on average 0.6 percentage point a year.
U.S. Job Openings Edged Lower
Number of openings in September exceeded the number of unemployed Americans by 1.26 million.
Jobs remain plentiful and hiring solid—showing that while the labor market has cooled, it remains a source of strength for the U.S. economy.
The number of unfilled jobs declined to a seasonally adjusted 7.02 million at the end of September, the Labor Department said Tuesday. That was the fewest available jobs in 18 months. But openings still exceeded the number of unemployed Americans—those without work but actively looking—by 1.26 million. Before 2018, openings had never exceeded unemployment in records back to 2000.
“The labor market remains strong, but is clearly slowing down,” said Nick Bunker, an economist at job-search site Indeed.com.
Openings, down from 7.39 million a year earlier, have generally declined this year. But hiring held fairly steady in recent months. For September, 5.93 million Americans were hired, up from 5.67 million a year earlier. The result is the number of unemployed Americans has also edged lower.
In September, the unemployment rate fell to 3.5%, the lowest reading in 50 years, while the rate in October ticked up to 3.6%. The increase in part reflected that a strong labor market and better wages were drawing some potential workers off the sidelines.
The rate at which workers quit their jobs, viewed as a proxy for confidence in the labor market, edged down to 2.3% in September from 2.4%, Tuesday’s report showed. The August and September quits rate was the highest recorded since 2001.
The solid labor market is supporting consumer spending and the broader U.S. economy.
The Institute for Supply Management said Tuesday that activity in the U.S. service sector grew at a faster pace last month. The ISM’s nonmanufacturing index was 54.7 in October versus 52.6 the prior month. A reading above 50 indicates an expansion in activity, while a reading below 50 indicates a contraction.
The employment index increased to 53.7 from the September reading of 50.4. Anthony Nieves, head of the ISM survey, said services-sector employment “looks good right now,” which is important because “where employment goes, the sector goes” in the labor-intensive sector.
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