MADISON, Wis. (6/9/15)--On the heels of a positive jobs data report, a pair of CUNA economists were asked last week to break down its broader implications.
The Bureau of Labor Statistics reported Thursday that the economy added roughly 280,000 jobs in May, nearly 30,000 more than the average number of jobs added per month over the last year.
“There’s no question that it’s a uniformly positive report,” Mike Schenk, CUNA vice president of economics and statistics, told CreditCards.com. “We’ve added 3.1 million jobs in the last year. And, if you compare that to calendar years in the past, you have to go back to 1999 to see numbers comparable to that.”
Schenk also spoke about the increase in average hourly earnings, which climbed 8 cents to $24.96 in May. On an annual basis, earnings rose by 2.3%.
“That’s the strongest reading in two years, so that’s a hopeful sign,” Schenk said. “It’s stronger than the increases in core inflation, so that’s outpacing increasing prices. Plus, if you look past the three-month gains, the average wage gain is actually 3.3%.”
Perc Pineda, CUNA senior economist, told Forbes that the improvements seen in the job market are important given the financial strains being placed on many of those entering the workforce.
“We have added 3 million Americans into the labor market, but most are burdened with student debt,” Pineda told Forbes.
And what does this all mean in terms of gauging the timing of a rate hike from the Federal Reserve?
“I think what this report will do is increase the likelihood that we see the Fed engaged earlier rather than later,” Schenk said (CreditCards.com). “Federal funds futures were pushing an increase all the way out to December because the earlier weak data was creating uncertainty. However, given this report, that’s extremely unlikely.”