US adds robust 250,000 jobs; pay growth fastest since 2009
- Author: Eleanor Harrison Nov 05, 2018,
Nov 05, 2018, 1:18
"These are incredible numbers", Trump said of the employment data on Twitter.
US employers added a stellar 250,000 jobs last month and raised average pay by the most in almost a decade.
August's job gains were revised up from 270,000 to 286,000 and the change for September was revised down from 134,000 to 118,000.
U-6, or underemployment rate, fell to 7.4 per cent from 7.5 per cent; includes part-time workers wanting full-time job, people who aren't actively looking. However, Hurricane Michael, which hit Florida and Georgia last month, will have had a detrimental impact on payrolls in that region through worker absence. Nominal average hourly earnings rose by 3.1 percent over the past 12 months. A separate report Wednesday showed that wages and salaries for private-sector workers rose 3.1 percent from a year earlier.
Inc. last month lifted pay for it lowest-earning employees to $15 an hour.
Average work week increased to 34.5 hours, from 34.4 hours in prior month; a shorter workweek has the effect of boosting average hourly pay.
Despite the excitement over the 3.1 percent wage growth, some economists caution this is not a "magic number" and should be viewed with a grain of salt. Over the year, the unemployment rate and the number of unemployed persons declined by 0.4 percentage point and 449,000, respectively. The Fed raised borrowing costs in September for the third time this year.
US stocks were trading mostly lower and the dollar was slightly weaker against a basket of currencies on Friday. There were 1.5 million marginally attached workers in the US labor force, little different from a year earlier.
The country now has 7.1 million job openings, a record high, the Labor Department announced Tuesday. Thanks to the hurricanes last month and at this same time previous year, some of the wage growth could amount statistical noise, some experts think.
"We are averaging 212,000 jobs per month in 2018 to date - one of the strongest years for job growth in recent history - and in combination with the low unemployment rate, this will continue to push wage growth higher", Kan said.
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. At the same time, an influx of new job-seekers increased the proportion of Americans with jobs to its highest level since 2009.
According to a report last week from the research arm of the payroll processing firm ADP, for instance, American workers are earning almost $1 more per hour on average than they were a year ago.
Retail payrolls probably remained weak, weighed down by layoffs related to Steinhoff's Mattress Firm bankruptcy as well as some store closures by Sears Holdings Corp. Construction employment grew by 30,000.
Michelle Girard, chief United States economist at NatWest Markets, said that although some analysts warned of inflation, the pay increase should not bother policymakers at the Fed.
Last month, the economy added 47,000 jobs in health care, 42,000 in leisure and hospitality, 32,000 in manufacturing, 30,000 in construction and almost 25,000 in transportation and warehousing. Still, October's outsize gain might have reflected, in part, a rebound from September, when Hurricane Florence depressed job growth. Manufacturers added 32,000 after two months of smaller gains, defying fears that Trump's trade fights would slow hiring in that sector. -China trade war and impending November midterm elections that are just days away.