Why to Worry About the 2013 Job Market, in 5 Charts

Things will continue to improve, but the improvements will be tepid. Here's why.


This means that the jobless rate could have trouble inching downward in 2013. On the bright side, however, it may also mean that a flat or even growing jobless rate throughout 2013 might be a good thing. More people in the labor force may signal that unemployed people feel optimistic enough to look for work again.

U.S. Labor Force Participation Rate Jobholders & Jobseekers as % of Workage Population

(Source: CohnReznick)

Workers getting paid peanuts.

Jobs have picked up since the recession. Wages have not. Average weekly earnings in December 2012 were around $819 in the private sector. However, when adjusted for inflation, earnings have fallen since the recession. A large supply of eager workers and a dearth of jobs can mean a buyer's market for employers—they can afford to spend a little less on their employees.

Jobs have managed to recover while wages have fallen, but spending drives economic growth. If workers have smaller paychecks, that means less economic activity, meaning less job creation.


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