This morning’s employment situation report from the Bureau of Labor Statistics showed that the economy added 160,000 jobs in April, which is notably slower than recent months. Wage growth held steady at 2.5 percent, in line with the past few months and slightly stronger than last week’s employment cost index report. Most observers believe that the Federal Reserve will not raise interest rates in June—given that wage growth is below any reasonable target, this is a prudent move. Working people and their families are keenly aware of the fact that strong wage growth continues to be the lagging indicator in this recovery. Beyond fighting inflation (which is nowhere in sight), there’s little reason for the Fed to use interest rate hikes to control asset bubbles, so there’s no incentive for a rate increase in the near future.

The labor force participation rate (LFPR) has been ticking up for several months but unfortunately it dipped down in April, from 63.0 percent to 62.8 percent. In general this indicator has been on the rise, and hopefully this is just a one-month blip. Rising labor force participation is a sign that more people are getting off the sidelines and starting to look for work. Many workers have been waiting in the wings for a while and as they begin to more actively seek work this can put downward pressure on wages. We need to return to steady increases in LFPR and see stronger wage growth for a sustained period of time before we can say we’re nearing full employment and a healthy economy.