The American economy added 156,000 new jobs last month, 90,000 of which were needed to keep up with population growth. This means that net job growth clocked in at a modest 66,000 jobs. The headline unemployment rate worsened slightly to 5.0 percent and the labor force participation rate improved slightly to 62.9 percent.
Beneath the surface, this jobs report was stronger than it looks. The unemployment rate increased only because there were lots of new labor force entrants—some of them probably recent college grads—most of whom found jobs. The number of labor force dropouts declined by over 200 thousand. Hourly earnings of production and nonsupervisory employees were up at an annual rate of about 2.9 percent compared to last month. That’s not red hot performance, but it continues a streak of decent increases. The labor market doesn’t yet qualify as tight, but it’s finally tight enough to be generating some consistent wage gains.