Good news for job hunters: Unemployment is expected to continue its steady decline in the coming months. The national unemployment rate will fall from 5.3 percent to 5.2 percent in July and reach 4.7 percent in December, according to projections from Regis Barnichon, an economist at the Barcelona Graduate School of Economics.
That’s consistent with the slow but steady pace of the economic recovery. Last July, the unemployment rate stood nearly a percentage point higher than it is today, and in July 2013 it was two percentage points above the current rate. Unemployment peaked at 10 percent during the recession, in October 2009.
Some key indicators suggest an improving labor market.
Earlier this month, the number of Americans filing initial applications for unemployment insurance hit a 42-year low. Meanwhile, 223,000 Americans found work last month, according to the Bureau of Labor Statistics, and payroll processor ADP said that companies added 237,000 jobs in June, the most since December. The federal government’s July jobs report -- to be released next Friday -- is expected to show further payroll growth. The economy has added nearly 3 million jobs in the past year.
However, some significant signs of weakness persist. Wage growth remains effectively stagnant, with average hourly earnings inching up by a meager 2 percent over the last year. At the same time, labor force participation remains historically low. Last month’s figure -- 62.6 percent -- was the lowest the number has been since 1977. The large numbers of Americans who have given up looking for work altogether have helped drive the declining unemployment rate.
Modest wage increases in the private sector and minimum pay hikes on the city and state levels have generated attention. At the same time, they aren’t expected to leave any substantial mark on national employment figures or wage growth just yet.