Last Jobs Report Before 2016 Election: Solid Employment and Wage Growth

The American economy added 161,000 jobs in October, coming in slightly below expectations but still representing strong growth for the labor market as a whole, according to the Bureau of Labor Statistics.

Unemployment remains low at 4.9 percent, for a total of 7.8 million people who are out of work and actively looking for a job.

But the best figure in the report is the wage growth number. Hourly earnings rose 2.8 percent in the past year, the highest reported rate of wage growth since 2009 during the recession.

"This was a solid jobs report, with steady employment growth and stronger wage growth," said Chief Economist Curt Long at the National Association of Federal Credit Unions.

Even though job growth has remained steady for most of President Obama's two terms, low wage growth has been a defining feature of the post-recession economy. Rising incomes are a tangible way Americans can feel the economy improving, and its absence has dampened enthusiasm for labor market doing well by other measures.

Rising incomes also suggest that the 4.9 percent unemployment may be close to the market's carrying capacity, what economists call "full employment."

"From the Fed’s perspective, this report supports a rate hike in December," Long said. Many observers have long expected the Fed to raise interest rates at the end of 2016, on the assumption that the data would continue to show a formidable economy.

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Mark Hamrick, a senior economic analyst at Bankrate.com, agreed with Long's assessment.

"While 161,000 jobs added to payrolls is below expectations, the upward revisions to August and September totaling 44,000 more jobs helps to alleviate worry about the October employment shortfall," he said.

"The 2.8% year-over-year gain in average hourly earnings stands out most of all," he continued. "This is 'money in the bank' for workers feeling like they’ve been waiting a long time for this piece of the economic recovery puzzle to be added. There’s more work to do in the wages and incomes department, but this is good to see nevertheless."

But Hamrick was disappointed by the lack of job growth in the manufacturing sector, a group of workers who have garnered substantial attention in the 2016 campaigns.

"Many of those separated from this sector for a long time, perhaps lacking sufficient meaningful skills to get back into the workforce, feel like their government has forgotten them," he said. "In this report, we see that the number of long-term unemployed, meaning those jobless for a half-year or more, was unchanged at 2 million. They account for one-quarter of the unemployed."

This close to an election, it's unclear if voters will pay much attention to a relatively strong employment report. But the underlying conditions they represent — a decent if not spectacular economy — may already be baked in to voters' perceptions of the candidate's visions for the future.

Hillary Clinton's campaign tweeted out approval of a post showing the steady decline in the unemployment rate, essentially tying her candidacy to Obama's achievements:

Trump's campaign, on the other hand, called the report "disastrous," ignoring the headline figures and focusing on other measures. The campaign's view does not accord with most independent analysis. Trump himself has previously questioned the honesty of BLS's data.

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