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Wages still catching up with jobs

The U.S. Bureau of Labor Statistics reported this morning that the U.S. unemployment rate had fallen to 4.3% at the end of May, its lowest mark in 16 years. The figure declined for the fifth consecutive month after a 2016 that saw the rates hover around 4.9% to 5% for much of the year.

The economy added about 138,000 new jobs in May, missing what analysts estimated would be 184,000 jobs.

Annual wage growth through April ticked up to 3.5% from 3.4% in March. The number is an estimate compiled by the Atlanta Federal Reserve and measures the rolling three-month average of annual hourly wage growth: essentially what the average employee can expect their earnings to grow over the next 12 months. Historically, wage growth overall has tracked unemployment with some lag. In the years following the recession wage growth stagnated around 2% while the unemployment rate declined at a more rapid pace. Wages improved relatively better in the past 15 months, particularly a surge last fall to near 4%, before cooling over the following months.