The U.S. unemployment rate is expected to get better, millions of people find work, and wages grow a little faster over the next couple of years, according to a recent study by Credit Suisse Bank analyst Julia Dumanskaya.
She said poor job prospects prompted a higher than usual number of people to attend universities and other training during and after the recession in the hope of becoming more employable. She added the gradually improving U.S. economy means that about 2.5 million more people will find opportunities for work over the next couple of years.
Dumanskaya projects that U.S. unemployment will fall to 4.7 percent by the end of 2016. The U.S. jobless rate has already fallen from a recession-high of 10 percent to the current 5.5 percent.
Economists surveyed by the Bloomberg financial news service say the jobless rate will probably decline slightly when the latest data is reported on Friday, showing 5.4 percent of people willing and able to work are unable to find jobs.
The Credit Suisse study says when unemployment falls, companies have to compete harder for workers, and that puts upward pressure on wages. But wages are currently rising more slowly than they have in previous recoveries.
That is partly because many of the new jobs are in low-paying sectors like retail and hospitality. Other areas, like information technology and finance have seen wage growth, but these jobs make up too small a portion of the workforce to push up average wages very much.
Dumanskaya says wage growth could speed up if worker productivity grew more, and says faltering business investment has slowed gains here.
PNC Bank Senior Economists Gus Faucher is also optimistic about the U.S. job market, unemployment, and wage growth.
He says continued recovery will cut the ranks of people who are under-employed, including millions who want full time work but can only find part-time employment. In a Skype interview, Faucher says by the end of this year, there will also be fewer college graduates holding jobs traditionally done by people with just high school diplomas.
While economists have said the recession ended years ago, Faucher says reducing the ranks of the under-employed may convince workers and employers that the recovery is real.
