Friday, January 05, 2007

Good News on The Jobs and Compensation Front

The news continues to be good regarding jobs and wage growth:

Employers stepped up hiring last month, boosting payrolls by a healthy 167,000 and keeping the unemployment rate steady at a still historically low 4.5 percent. Workers' wages grew briskly.

For all of 2006, the nation's unemployment rate dropped to a six-year low of 4.6 percent as the economy added 1.8 million jobs. In 2005, the unemployment rate averaged 5.1 percent.

Workers, many of whom had seen their paychecks eaten by inflation, saw wages grow robustly last month. Average hourly earnings jumped to $17.04, a sizable 0.5 percent rise from the prior month. Analysts were forecasting a more modest, 0.3 percent increase.

Over the last 12 months, wages grew by a strong 4.2 percent. That matched the annual gain registered in November and was exceeded only by a 4.3 percent annual increase in November 2000.
I must admit, I did not expect the economy to be this strong. All of the signs of a slowing economy were there, but reality is the global economy is still strong and the adaptation shown by the American economy is as robust as it has ever been. We may see a strong economy and stock market all the way up to the 2008 elections. The Fed isn't going to raise interest rates nor does it appear they will drop them. Inflation is tame.

It's all good.

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