US wage growth remains stagnant, more Americans give up looking for work
US wage growth remained stagnant in June and many unemployed Americans gave up looking for work, a sign that the labor market remains weak despite a drop in the country’s unemployment rate, a report says.
The US economy added 223,000 jobs last month, and the unemployment rate fell to 5.3 percent from 5.5 percent, the US Labor Department has reported.
The unemployment rate fell not because many people have found jobs, but because many unemployed people gave up on their job searches and were no longer counted as unemployed.
The result is that the proportion of Americans working or looking for work fell to a 38-year low, which reflects rising discouragement.
The government doesn’t count people as unemployed unless they’re actively searching for work.
And wages, which had shown signs of finally rising earlier this year, have now stalled, Labor Department figures showed.
Employee earnings have risen just 2 percent over the past year, a trend going back to the 2007-09 recession.
The lackluster pay increases suggest that many employers may see no need to raise wages to attract or retain qualified workers and that there are more people available for work than the unemployment rate would otherwise indicate.
The US economy shrank at a seasonally adjusted annual rate of 0.2 percent from January through March, the Commerce Department said last month.
Meanwhile, exports fell 5.9 percent and imports increased 7.1 percent in the first quarter.
Consumer spending growth, which accounts for more than two-thirds of US economic activity, also slipped to 2.1 percent, down from 4.4 percent in the final three months of 2014.