Personal income has reached new highs on the back of small gains in salaries and a large gain in government benefits. Job holders are working longer hours and getting paid a little better since the recession ended. These data points confirm that the employment picture really has been brightening in the past few months.
No matter what the unemployment report shows each month, a number of analysts point to problems with the data. Compiled from hundreds of sources and based on dozens of estimates, the report will always have flaws. To get a better idea of employment trends, additional data can be reviewed.
In the most recent employment report, the average number of hours worked by people with jobs continued to move higher. This number has been in a down trend since it was first reported in 1970, when people worked an average of 36.8 hours per week. In February, the average was at 34.5 hours a week, about 2 percent above its recession lows.
Average wages have also increased slightly in the past few years and are up nearly 2 percent since bottoming.
Employers pay a salary that is equal to wages times hours worked. They are now paying employees 4.5 percent more, in total than they did in the recession.
Employment is recovering, even though more people are not working.
Combined with a 23 percent gain in government transfer payments to individuals who usually aren’t working, personal income has fully recovered.
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