Many economists reacted enthusiastically to Friday's jobs report for October, but trouble might lurk beneath the surface.
The enthusiasm stemmed from the fact that non-farm payrolls rose 214,000 last month, and the unemployment rate dropped to a six-year low of 5.8 percent. Jobs have now increased more than 200,000 for nine months in a row, the longest streak since 1994.
But on the downside, only 40 percent of the jobs created in October were in fields that pay above the average national hourly wage of $24.57, down from 60 percent in September, according to
MarketWatch reporter Jeffry Bartash.
"The mediocre nature of many new jobs and slow wage growth are perhaps the biggest obstacle to a full-blown economic recovery," writes Bartash.
To be sure, for the year to date, 58 percent of the jobs created this year pay more than the average hourly wage, compared with less than 50 percent last year, according to a MarketWatch analysis. And data can be bumpy month to month.
Overall, average hourly wages climbed only 2 percent in the 12 months through October, barely topping the 1.7 percent increase in consumer prices for the 12 months through September.
"The quality of job creation remains insufficient to translate into wage pressures," Lindsey Piegza, an economist at Sterne Agee Group, tells
Dow Jones.
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