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Unemployment falls to 5.5%, wages rise 0.1%

Unemployment in the United States fell to 5.5% after 295,000 new jobs in February.  This is the lowest unemployment percentage since spring of 2008.

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Job growth was heavily concentrated in the service sector (66,000 jobs in leisure and hospitality, 54,000 in education and health), as well as in construction (29,000 jobs).  Long term unemployment has also fallen 6% on the year to 36.8%, which is still above 2007 pre-recession levels.

Despite this recent good news, wage growth remains sluggish, growing only 0.1% in February after having grown by 0.5% in January.  Economists suggest that the economy is not reaching its potential.  However, some economists are predicting this might soon change.  “We’re facing a turning point, and we’re going to see more pressure on wages,” said Tara Sinclair, an economist employed by

Another source for concern is labor force participation rate, which fell from 62.9% to 62.8% in February.  This low level of labor force participation has not been seen since the 1970s.


  1. So … “going to see” versus “should wait until we do see” becomes a very important distinction. But can’t you add more nuance? Yes, labor force participation is low, but the baby boomers are retiring so that tells us nothing, without more quantification … which I have done.

  2. HeeJu HeeJu

    I wonder what could explain the falling labor force participation rate; a previous blog post/comment I read stated that positive outlook of economy today has encouraged many discouraged workers to join the labor force again and look for jobs, so I would have expected the rate to increase.

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