So analysts wonder whether the US economy can remain a relative island of prosperity in an ocean of global slowdown, employment figures, published Friday, January 8, came bringing some water to the mill. With the creation of 292,000 jobs in the month of December 2015, the labor market in the US has once again demonstrated a surprising resilience, while the global macroeconomic and financial environment is becoming more unstable.
If the unemployment rate remained stable at 5% of the labor force, the Labor Department revised up job creation figures of the two previous months with 307,000 in October 2015 (against 298,000 previously announced) and 252,000 in November (against 211,000). Over the whole of 2015, the US economy created 2.65 million jobs, or 500,000 fewer than in 2014. Despite this, the United States show good strength while rising dollar and the slowdown in the Chinese economy in particular and emerging countries in general threatens to slow their growth.
A little too good to be true? Christophe Barraud, chief economist at Securities Market is not far from thinking. “This jobs report is very positive. That said, it begs the question of the influence of a particularly mild winter so far, which has enabled sectors such as construction or restoration to recruit dynamically. The trend could be reversed in the coming months “, he warns.
This dynamism of the labor market is likely to reinforce expectations of a further rise in interest rates . According to data compiled by CME Group firm, slightly more than half of traders and investors bet that the Federal Reserve (Fed) would continue its monetary tightening at its March meeting. The central bank has made, in December 2015, with a first rate increase since 2006. Still, if the employment figures are encouraging, the other indicator monitored by the Fed, inflation remains very below its 2% target.
Moreover, one of the areas of concern of the report released Friday by the Labor Department remains wage developments, which fell in December 2015. The US economy, expected to be returned to a situation of full employment, still generates no pressure on employers to raise wages due to labor supply became more rare. The evolution over one year remains disappointing with an increase of 2.5%, while in the previous recovery cycles in the United States wages average increase of over 3.5%.
“Baby boomers, generally well paid out by mass of the labor market and are replaced by younger people, lower paid, explains M.Barraud. We returned in a less dynamic growth cycle than in the past, which is reflected in inflation and wages. Thus the balance in terms of full employment would perhaps not is 5% unemployment as was thought until now, but perhaps 4.5%. “
A corollary of this demographic phenomenon and lower growth: there is no real thrill on the participation rate of the population in the labor market. This indicator measures the proportion of Americans of working age, who has a job or is seeking one and sticks to its lowest levels since the 1970s with a rate of 62.6%, 0.1 percentage point Unless a year ago. Moreover, if we take into account part-time and experienced people discouraged to look for work, the unemployment rate stabilized at 9.9% in December 2015.
The low rates participation, consequence of the decision of a significant part of the workforce to withdraw from the labor market failing to find a job to match its ambitions, is partly explained by the increasing polarization of skills demanded by employers . As leading a study released this week by the Federal Reserve Bank of St. Louis, this movement is at work as a result of digitization, automation and offshoring.
The jobs are available and focus more on high-skill or low value contrary positions. “The picture is clear: jobs that are not routine, involving cognitive and manual skills rose sharply for several decades, while routine jobs stagnate” , advanced this report. A phenomenon of long-term, which also weighs on wages. The largest providers of many jobs are indeed poorly paid sectors such as catering, hospitality and distribution.
“Even if US growth slowed in the fourth quarter, the United Rather STATES come out well “, however, summarizes Mr. Barraud. Until when ? This is the question, while activity in the industry is contracting for two months and sluggish inflation is likely to continue in 2016.