U.S. job growth soars; annual wage gain largest since 2009 Lucia Mutikani
https://www.reuters.com/article/us-usa-economy/u-s-job-growth-surges-annual-wage-gain-biggest-since-2009-idUSKCN1N70AJ
U.S. job growth rebounded sharply in October and wages recorded their largest annual gain in 9-1/2 years, pointing to further labor market tightening that could encourage the Federal Reserve to raise interest rates again in December.
The Labor Department’s closely watched monthly employment report on Friday also showed the unemployment rate was steady at a 49-year low of 3.7 percent as 711,000 people entered the labor force, in a sign of confidence in the jobs market.
Sustained labor market strength eased fears about the economy’s health following weak housing and business spending data. President Donald Trump cheered the robust jobs report, which came less than a week before the midterm elections that will decide who controls the U.S. Congress.
“These are incredible numbers,” Trump tweeted.
Nonfarm payrolls increased by 250,000 jobs last month as employment in the leisure and hospitality sector bounced back after being held down by Hurricane Florence, which drenched North and South Carolina in mid-September.
There were also big gains in construction, professional and business services payrolls, and manufacturing, where employment increased by the most in 10 months.
The economy created 118,000 jobs in September.
Economists polled by Reuters had forecast payrolls would increase by 190,000 jobs in October and the unemployment rate would be unchanged at 3.7 percent. The Labor Department said Hurricane Michael, which struck the Florida Panhandle in mid-October, “had no discernible effect on the national employment and unemployment estimates for October.”
Average hourly earnings rose five cents, or 0.2 percent, in October after advancing 0.3 percent in September. That boosted the annual increase in wages to 3.1 percent, the biggest gain since April 2009, from 2.8 percent in September.
Employers also increased hours for workers last month. The average workweek rose to 34.5 hours from 34.4 hours in September.
“The report shows a booming U.S. economy with a sufficient whiff of wage inflation to keep the Fed on track to raise rates in December and at least twice next year,” said David Kelly, chief global strategist at JPMorgan Funds in New York.
The dollar .DXY was trading higher against a basket of currencies. Stocks on Wall Street fell while U.S. Treasury yields rose.
Strong annual wage growth mirrors other data published this week showing wages and salaries rising in the third quarter by the most since mid-2008. Hourly compensation also increased at a brisk pace in the third quarter.
Firming wages support the view that inflation will hover around the Fed’s 2.0 percent target for a while. The personal consumption expenditures price index excluding the volatile food and energy components, which is the Fed’s preferred inflation measure, has increased by 2.0 percent for five straight months.
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