United States payrolls rise more than forecast as wage gains hit 3.1%

Donald Trump

Donald Trump

Nonfarm payrolls rose 250,000 in October from the prior month, Labor Department figures showed Friday, topping the 200,000 median estimate of economists. Employers have now added to their payrolls for a record 97 straight months, and the jobless rate, at 3.7% in October, is holding at its lowest level since 1969.

Sustained labour market strength could ease fears about the economy's health following weak housing data and stalling business spending.

Hurricane Michael, which slammed into the Florida Panhandle and southern Georgia last month, had no discernible effect on the jobs data, the government said.

With just days to go until the crucial 2018 midterm elections, the economy is roaring after adding 250,000 new jobs in October.

Politico noted that Trump, in his campaigning for Republicans, has focused more on immigration and the Central American caravan than the economy. Average hourly earnings rose 0.2 per cent month-on-month and 3.1 per cent year-on-year, up from 2.8 per cent growth in September. Separate Labor Department data released earlier this week showed that salaries in the third quarter were, on average, 2.9 percent higher than last year's. Text "NEWS" to 22840 and always receive verified news updates.

The probability of another 25 basis-point (one-quarter percentage point) rise in the federal funds target, from 2%-2.25% now, at the december 18-19 meeting of the Federal Open Market Committee continues to hover around 75%, according to Bloomberg data.

The labor force participation rate increased by 0.2 percentage point to 62.9 percent in October. Still, October's outsize gain might have reflected, in part, a rebound from September, when Hurricane Florence depressed job growth. The last time this occurred was over a year ago (June 2017).

"Businesses have started relaxing their (hiring) standards", Joel Naroff of Naroff Economic Advisors told USA Today. "If that is the case, those who are hoping for only one or two rate hikes next year may be disappointed".

With relatively few unemployed Americans looking for work, employers are increasingly being forced to bid up wages to poach workers from other employers or retain the ones they have.

The country has 7.1 million job openings, a record high, the Labor Department announced Tuesday.

Online retail giant Amazon.com Inc. announced last month that it would raise its minimum wage to $15 per hour for US employees starting in November. Workers at United States Steel Corp are set to receive a hefty pay rise also.

"Faster wage growth along with a remarkably strong employment report in October will certainly lend some support to the hawks".

Among the rosy employment statistics in Friday's monthly hiring report, one especially shines: Worker wages in the USA are finally taking off.

That is seen supporting the economy through at least early 2019 when gross domestic product is expected to significantly slow as the stimulus from the Trump administration's $1.5 trillion tax cut package fades. Retail payrolls rose by only 2,400 amid declines in employment at gasoline stations and sporting goods and music stores. Although the purchasing managers index for manufacturing fell in October to the lowest level since April, indicating slowing demand, the employment report is an an indication that tariffs on imported aluminum and steel haven't negatively impacted hiring in factories thus far.

Although pay increases can help boost spending and propel the economy's growth, they can also lead companies to raise prices to cover their higher labor costs.

Recommended News

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.