Is There Such a Thing as a Job Bubble?

The US had yet another month of job creation above 200,000. After some updating by the Bureau of Labor Statistics, it is apparent that job creation in the US is on a roll. Two hundred thousand or more each month since February of this year is the best streak since 1995. Jobs have now accrued month-over-month for 49 straight months, the best streak since 1939. Aside from the massive job creation streak, the unemployment rate is also looking rosy, down 0.1 percentage points to 5.8%. But if a steadily-falling unemployment rate does not impress you, then maybe the recent drop in a more stubborn metric will do the trick. An alternative measure of unemployment, which adds in all people euphemistically-described as “marginally attached” (people not working or looking for work, but who want a job) dropped about 0.3 percentage points, too. The one offset to the strong job creation numbers is wages, which grew only 2.2% from October 2013 (barely beating inflation). The Federal Reserve will undoubtedly take note of the falling jobless rate, but will likely fall back on the low wage gains to keep policy rates low for the time being.