There's no question that the October jobs report released Friday morning was the best in some time. Particularly encouraging was that employers reported stronger job creation than they had in September and that the unemployment rate ticked up only because almost 600,000 people joined the labor force, perhaps encouraged by improving prospects.
But it wasn't entirely positive. The report --and other recent indicators -- revealed a soft underbelly: stagnant wages.
Last month, the average hourly earnings for all private sector workers actually fell a penny, to $23.58 an hour, the Labor Department said. Weekly paychecks are up only $12.38 over the past year, a measly 1.5 percent, to $811.35. That's even worse than it sounds: The numbers are not adjusted for inflation, so in real terms the average worker likely saw a pay cut (October inflation data aren't out yet, but for the year ended in September consumer prices rose 2 percent).
The report had worse news for "production and nonsupervisory" workers, the legions of Americans who aren't managers. Their hourly pay also fell, but so did their hours, to 33.6 hours of work a week from 33.7. Michael Feroli, senior economist at J.P. Morgan Chase, points out in a report that measures of pay and hours for this group of workers are more reliable than those for workers overall, and are sending a gloomier signal.
That is consistent with other recent data. For example, the Commerce Department reported that inflation-adjusted disposable personal income was unchanged in September, after falling 0.3 percent in August. The same report showed that Americans are spending more money, but they are doing it by reducing their savings, not because they are earning more.
Ultimately, rising wages will need to go hand in hand with a growing job market, and it may be that more jobs will have to come first. After all, it is hard for workers to demand raises when employers feel like they have ample alternatives among the unemployed. But it is little solace for people who have been working hard and have nothing more to show for it.