As employers continue to create jobs on a regular bases, 250,000 created in October alone, the unemployment rate remained at the low rate of 3.7 percent nationally. This is also a result of a 0.2 percent increase of the population looking for work or currently working, which means the number of people unemployed, fell by 487,000.
To increase this number, employers began paying a higher wage, which was reflected in the average hourly earnings increase from 2.8 percent to 3.1 percent for the year. Altogether, this may just very well be the best time for the US labor market in the last 18 years.
So how long can this last?
Strong incentives for businesses to invest in productivity-enhancing capital, should mean that these changes will not be short lived. Currently, much of the stimulus is coming from the Keynesian stimulus created by putting money into the economy. While this can show a quick uptick, the longevity of it is usually short lived. Until businesses begin to invest in the higher productivity, we will see the end of the Keynesian stimulus.
What does this mean for companies? If wages continue to increase, the real question is how many more sidelined potential workers would enter the job market. The more people are able to enter the job market, the more growth the economy can sustain before inflation hits. Working adults from 25-54 increased 0.4 percent from September to October.
With all the evidence in our favor, there is no reason why job growth cant continue to sustain for a few more years.