2016 ROI Fourth Quarter Edition with Q & A HIS Capital Group Edition | Page 9

- AMERICAN EMPLOYMENT IN 2016 WAS OK 2017 PROBABLY MORE DECELERATION
Employment growth is often the measuring stick
by which economic success is measured. The past
few years have been relatively good, although
a decelerating trend is emerging. In 2014, the
economy created 3.015 million jobs. In 2015, that
dropped to 2.744 million. In 2016, that number is
likely to drop again, perhaps to 2.1 million. This
deceleration is clear in the actual difference and
in the year-over-year growth figures (next two
graphics).
The decent labor market picture coincides with
mediocre wage growth. At this point in the
economic cycle – 2017 will be the eight year of

economic “expansion” – wage growth should be
comfortably above 3%. Instead, wage growth is
stubbornly stuck below 2.5%. We think 2017 will
see wage growth finally surpass 3%.
The question has been asked – with so many jobs
created, can job growth continue? Is there room
for more job growth? The answer is yes. By simply
just looking at the Employment to Population Ratio
and the Employment by Age Group demographics
(the graphs are on the bottom of page 8 and the
top of page 9), it’s clear there are tons of individuals
sitting on the sidelines, and that the younger
generation is still somewhat in the waiting wing.

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