U.S. wage growth hits nine-year high

Marcus Newton
November 5, 2018

The 3.0 percent unemployment rate for individuals with some college or an associate degree is the lowest it has been since July 2001.

On Friday, the government reported employers added a strong 250,000 jobs in October and the unemployment rate remained 3.7 percent, the lowest level in almost 50 years. The unemployment rate stayed at a five-decade low of 3.7 per cent. This would boost the annual increase in the wages to 3.1 percent, the biggest gain since April 2009, from 2.8 percent in September.

Still, inflation has picked up a bit in the past year as well, eating away at some of those pay raises.

Wages in the U.S. grew at their fastest pace for nine years last month, according to the latest official figures.

The wage gains are coming at a time of record profits for US companies after Trump and congressional Republicans enacted the biggest corporate tax rate cut in the nation's history. The rate slightly decreased to 7.4 percent in October when counting people who sought a job in the past year and also those with part-time jobs in want of a full-time one. Recently, the unemployment rate for African Americans and those without a high school diploma also hit record lows.

"The market is very tight for good people", he said, and wages are rising rapidly, especially in Silicon Valley.

Cheyenne Mauzy of Springfield, Missouri, had held out for higher pay when she started job hunting in June.

"There was a minimum we had to make", Mauzy, 28, said, referring to calculations she made with her husband. It is also occurring for relatively lower-skilled jobs such as warehouse workers and home-care aides.

Inc. last month lifted pay for it lowest-earning employees to $15 an hour. The government said the US has not created as many manufacturing jobs in October since 1998.

More news: Diablo Immortal is the mobile Diablo game nobody asked for
More news: Zero trailer: Shah Rukh Khan steals the show as Bauua Singh
More news: Trump Announces Plan to Limit Asylum-Seekers at Ports of Entry

Companies feel pressure to offer higher paychecks at a time when there are more jobs vacant than applicants to fill them, said Andrew Chamberlain, chief economist at jobs site Glassdoor.

The resulting strength in customer demand has led companies to steadily add workers.

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

The Federal Reserve is not expected to raise interest rates when it meets to consider monetary policy next week, but the latest jobs report likely solidifies the case for the rate hike expected in December. Combined, the two quarters produced the strongest six-month stretch of growth in four years. Professional and business services, which include engineers, architects and accountants, gained 35,000 jobs.

Further gains are anticipated in manufacturing jobs after the sector added 18,000 positions in September, but a measure of factory employment fell last month suggesting some slowdown in the pace of hiring. Construction employment grew by 30,000.

Retailers barely hired, adding just 2,400 positions, possibly reflecting the Sears bankruptcy.

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. Americans increased their spending by 4 percent in the July-September quarter, the biggest acceleration in almost four years.

The US jobs market remains incredibly strong and with wages starting to accelerate, domestic price pressures will increase.

There are other signs that pay growth is picking up. That trend, in turn, can accelerate inflation. That also puts workers ahead in real terms after the 2.3% year-over-year rise in the consumer-price index in the 12 months through September.

Other reports by MaliBehiribAe

Discuss This Article