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Low Wage Sectors Drive Employment Growth

Posted By Barry Ritholtz On December 7, 2012 @ 12:02 pm In Data Analysis,Employment,Wages & Income | Comments Disabled

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Source: Bloomberg Briefing

 

 

This morning, I mentioned how little I care about [2] the discrete monthly NFP data each month, saying the “overall trend” was what mattered. Specifically, I suggested looking at internals of the report for trends in wages, temp help, hours worked, etc. to determine the overall health of the labor market.

This report showed a continuation of a trend I find to be unhealthy: The outside contribution of low wage sectors to the NFP report.

Leisure and hospitality, health care and social assistance, retail and temporary jobs — all low wage sectors — have been responsible for over half (51%) of the private sector job growth the last year.

Weak wage growth is function of slack in the labor force and a lack of negotiating power amongst job holders and seekers.


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[1] Image: http://www.ritholtz.com/blog/wp-content/uploads/2012/12/low-wages.png

[2] how little I care about: http://www.ritholtz.com/blog/2012/12/how-meaningless-will-todays-nfp-be/

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