Job Quality and the Missing Middle

Wells Fargo Research Team Wells Fargo

Quality of New Jobs Improving

The unemployment rate is now near the Fed’s estimates of full employment, but doubts over the health of the labor market still linger. One frequently cited concern over the course of the labor market’s expansion has been the quality of new jobs. Updating our previous work on this issue (See Are American Wages About to Accelerate?, available on request) shows that the composition of new job growth has improved over the past year.

We grouped 75 industries into quintiles based on average hourly earnings in February 2010, when the labor market recovery began. As illustrated in the top chart, job growth over the past year has been strongest in the topwage quintile. Following closely behind is the second-highest paying income quintile and the lowest-wage quintiles. Together, the top two quintiles have accounted for 47 percent of jobs added over the past year despite accounting for only 40 percent of employment. The outsized share of new jobs in higher-wage industries marks a break from the early years of the expansion when hiring in high-wage industries was closely in line with the group’s employment share. Low-wage industries have actually accounted for a slightly higher share of new jobs added over the past year (48 percent), but were already a larger share of employment (44 percent) and therefore would be expected to account for a greater share of job gains.

Download the full report

Author

Wells Fargo Research Team

Wells Fargo

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.