U.S. job growth surges; annual wage growth largest since 2009

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Yearly wage growth hit a nine-year high.

"Initial jobless claims continue to trend in historically low territory, private sector assessment on employment conditions remains firmly in expansionary territory, and consumers' net assessment of the labor market stands at its highest level since March 2001". The U-6, or underemployment rate, fell to 7.4% from 7.5%.

July's job gains were revised slightly lower on Friday, showing the economy added 147,000 jobs during the month.

The U.S. economy added jobs for the 95th straight month in August, a record-setting streak. That makes it more challenging for Labor to adjust the employment totals to account for seasonal variations.

In August, factories expanded at their quickest pace in 14 years, according to a survey of purchasing managers.

Oil and gas extraction, which is categorized under mining by the BLS, saw a slight decrease of 700 jobs in the month of August. That includes people who are unemployed, working a part-time job when they want a full-time job, or have dropped out of the labor force because they have become discouraged. He has also raised pay for other workers who were already earning more than the minimum.

Trade tensions also could have dented business confidence and dampened hiring last month, Goldman Sachs says.

The US and China have slapped retaliatory tariffs on a combined $100 billion of products since early July. In dollar terms, average hourly earnings increased 10 cents from the previous month to $27.16. And so wages were up 2.9 percent from a year earlier, up from 2.7% in July and the biggest annual jump since June 2009.

Wage growth has been sluggish for most of the ongoing economic recovery.

A lack of wage gains has been a major blemish on an economy that President Donald Trump has called the strongest ever - and is now being boosted by his tax-cut stimulus.

Following Friday's report stock futures were lower and Treasury yields higher as investors see this report as indicating a more inflationary economic environment, one that is unlikely to see the Fed change its plans to raise rates two more times this year.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: "Wages aren't yet rising fast enough to scare the Fed, but the expectation that further gains are in the pipeline, given the lag from falling unemployment, explains policymakers' intentions to keep hiking". Wholesalers added 22,400 jobs. Healthcare added 41,000; transportation and warehousing, 20,000; and leisure and hospitality, 17,000.

Inside Friday's report, manufacturing payrolls were a bit of a disappointment, dropping by 3,000 after having been solid in both June and July.

Stevenson said economists will be watching whether employers are more willing to hire those groups of people given the limited number of available workers.

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