The Jobs Conundrum: Questions About Wages Persist

‘The job’s not quite done’

The U.S. economy is a paradox. Official figures show that growth is solid, jobs are plentiful and wages are climbing, and yet voters are mostly feeling down and giving President Biden little credit.

Friday’s jobs data is adding to that split-screen view, with economists pointing out red flags in an otherwise sterling report.

The labor market seems to be performing strongly. Employers added 353,000 jobs last month, almost double economists’ forecasts, and an additional 100,000 via revisions in previous months. Average hourly wages rose, too.

But that doesn’t necessarily mean workers are more prosperous. For a start, wintry weather shrank the average workweek to 34.1 hours in January. In particular, nonsalaried employees, especially those in retail, construction and the hospitality sectors, worked fewer hours, which probably ate into their pay, Bill Adams, an economist at Comerica Bank, said in a research note.

And Goldman Sachs’s wage tracker for U.S. workers fell after Friday’s report on a quarterly annualized basis.

Workers are increasingly anxious about changing jobs. Quit rates have fallen to a four-year low, suggesting employees are feeling less confident that they’ll find a better position elsewhere. If this trend persists, it could also put the chill on wage gains that soared during the so-called Great Resignation.