THE LUKEWARM 2004 LABOR MARKET

THE LUKEWARM 2004 LABOR MARKET: DESPITE SOME SIGNS OF IMPROVEMENT,WAGES FELL, JOB GROWTH LAGGED, AND UNEMPLOYMENT SPELLS REMAINED LONG
Center on Budget and Policy Priorities

The labor market showed some signs of improvement in 2004; most notable in this regard was the job growth that occurred in every month of the year. This was the first year of consistent job growth since 2000, signaling the end of the jobless recovery. The unemployment rate also showed improvement, falling from an average of 6.0 percent in 2003 to an average of 5.5 percent for last year. On the other hand, several other indicators and comparisons depict a labor market that remains distinctly weak...

• Among nearly all groups of workers, wages fell, relative to inflation.
• Over the course of 2004, job growth fell 1.4 million short of the amount that would be typical for a recovery.
• Due to the relatively modest amount of job creation, long-term unemployment levels remained exceptionally high, with the number of unemployed individuals exhausting their regular state, unemployment benefits and not receiving additional aid hitting a record level of 3.5 million.

These problems of falling wages, inadequate job creation, long-term unemployment, and a safety net that’s failing to protect job losers have contributed to a recovery that is considerably unbalanced. The economic growth that has occurred has flowed to corporate profits to a degree unseen in the post-World War II period, leaving relatively little for compensation.