United States added 250,000 jobs, wage growth fastest since 2009

United States added 250,000 jobs, wage growth fastest since 2009

PNC Bank predicts wage growth to average 3.3 percent next year, bringing it on par with 2007. September's payrolls were depressed by the hurricane that hit the southeast USA that month; those numbers were revised down to a gain of 118,000 from 134,000 originally estimated.

Investors were more closely watching wage growth in October, which rose 0.2% over last month and 3.1% over previous year, the fastest pace of annual wage gains since April 2009.

Those higher wages may be drawing more people into the labor market.

The share of Americans in their prime working years, between 25 and 54, who are working or looking for work rose to the highest rate since 2010 last month, at 82.3%.

Consumers are the most confident they have been in 18 years and are spending freely and propelling brisk economic growth.

The resulting strength in customer demand has led companies to steadily add workers. Though economists have predicted that hiring will eventually slow as the pool of unemployed Americans dwindles, there's no sign of that happening yet.

The jobs news will nearly certainly overwhelm another piece of economic news released Friday - the trade deficit in goods and services, which widened in September as imports rose more than exports.

President Donald Trump celebrated the country's rebound from the disasters Friday on Twitter.

More news: Facebook hackers sell private messages from 81,000 accounts

The US Federal Reserve is not expected to raise interest rates when it meets to consider monetary policy next week, but the latest jobs report is likely solidify the case for the rate hike expected in December.

Nonfarm payroll employment rose by 250,000 in October.

The Fed is not expected to raise rates at its policy meeting next week, but economists believe October's strong labor market data could see the US central bank signal an increase in December.

Hiring in October was strong in higher- and middle-income jobs. Professional and business services 35,000. Construction expanded by 30,000 roles, almost half of which focus on residential homes. Retail payrolls rose by only 2,400 amid declines in employment at gasoline stations and sporting goods and music stores.

Restaurants and bars - an industry where most workers only get paid if they show up to work - saw an increase of 33,500 in payrolls, following a 10,000 decrease in September that reflected Florence's impact. That boosted the annual increase in wages to 3.1 per cent, the biggest gain since April 2009, from 2.8 per cent in September. Combined, the two quarters produced the strongest six-month stretch of growth in four years.

Manufacturing output and hiring remain healthy, according to a survey by a private trade association, although increased tariffs have raised factory costs. The personal consumption expenditures price index excluding the volatile food and energy components has increased 2.0 percent for five straight months. That was the strongest annual gain in more than a decade.

"The employment report should help calm some concerns that the economy is slowing more quickly than it really is, the economy is really in good shape", said Ryan Sweet, a senior economist at Moody's Analytics in Westchester, Pennsylvania.

Still, the rosy number benefited from a favourable comparison to October 2017, when many low-wage employees returned to work after being sideline by Hurricane Maria, bringing the average of hourly earnings back down, Shepherdson said. About 711,000 people joined the labor force in October, and about 600,000 more people reported being employed. That trend, in turn, can accelerate inflation.

Related Articles