Nearly five years later, however, economists have declared 2014 the best year since 2009. According to the Christian Science Monitor, 200,000 jobs were added each month during 2014 in what the Wall Street Journal called the “best year of job growth in 15 years.” Additionally, the New York Times reported that many of the recently created jobs are higher-paying opportunities in industries that have been especially aggressive in hiring, such as health care and construction work. Overall, between 2013 and 2014, the unemployment rate decreased over a full percentage point, to hold at 5.6 percent in December 2014.
Despite this good news, researchers have cautioned against reading the report through a rose-tinted lens. In particular, despite this year’s robust job growth, hourly earnings in December rose only 1.7 percent compared to this time last year, barely above inflation rates.
The result of this mathematics is firms are able to collect and protect their profits, while many U.S. households will be unable to increase their living standards. In fact, Federal Reserve officials have used this data to suggest that the economy is “far from its full capacity,” though the dollar has been at its highest point in years, another sign of economic improvements. As Elise Gould tells SF Gate, “…we are still digging our way out of the recession, and wage growth remains stagnant and untouched by recovery.”
But 2014 is gone and some analysts believe that 2015 will be “the year of the consumer,” given declining oil prices and the lower costs for imported goods. In fact, an economist questioned by SF Gate likened the lower oil prices to a $1000 pay raise, if prices remain low. Additionally, Mark Znadi, chief economist at Moody’s Analytics, told the New York Times that as the economy heads toward a 5 percent unemployment rate, wage growth is also expected to increase.
Millions of Americans, however, are still searching for full-time employment, while others have dropped out of the labor force altogether. As Dan Greenhaus, chief strategist at the brokerage firm BTIG told WSJ, “The simple fact is we cannot consider an employment report a success…if wage data does not begin to accelerate” as well as the number of Americans with work.
(Photo courtesy of Tess Aquarium)