Wages rise as the United States adds 250,000 jobs in October
Wages rise as the United States adds 250,000 jobs in October
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US companies increased hiring in October, and wages increased the most year-on-year in almost a decade, a combination that is driving a growing proportion of Americans into the labor market.
In the last important economic report before the congress on Tuesday. choiceThe government said on Friday that employers in the United States added 250,000 jobs in October. The unemployment rate remained at a minimum of five decades of 3.7 percent.
Healthy economic growth is driving employers to contract at a rapid pace that shows no signs of weakening even with the economy in its tenth year of expansion. With the decrease in the supply of unemployed, it seems that companies are finally generating salary increases generous enough to attract and retain employees.
Average hourly wages increased 3.1 percent in October from the previous year, the fastest annual gain since 2009.
However, inflation has also risen a bit in the last year, reducing some of those wage increases. And the increase in wages last month also partly reflected a one-time drop in payment a year ago due to Hurricane Harvey.
Even so, the October increase suggests that after a decade of anemic growth, wage growth is recovering. At the same time, the influx of new job seekers increased the proportion of Americans with jobs to their highest level since 2009.
The economy has added jobs for 97 consecutive months, a record. That steady hiring has helped reduce the unemployment rate for Latinos to 4.4 percent, a historic low. Teen unemployment fell to 11.9 percent last month, the lowest since 1969. And the proportion of Americans without a high school degree who are working has reached the highest point in records dating back to 1992.
"There's nothing better than this," said Sun Wong Sohn, chief economist at SS Economics. "Obviously, the word has spread that there are good jobs with decent salaries."
Cheyenne Mauzy of Springfield, Missouri, had applied for a higher salary when she started looking for work in June. She felt that she needed a salary per hour high enough to offset the cost of child care for her three children.
"There was a minimum we had to do," said Mauzy, 28, referring to the calculations she made with her husband. "I had to take home enough child care, if I'm just going to work to pay for our child care, it should be our child care."
At the end of August, he took a job at a hospital in Springfield that paid $ 11.22 per hour.
Becky Frankiewicz, president of the ManpowerGroup North America staff firm, said the companies are testing a variety of strategies to fill jobs. Many retailers are removing the "seasonal" label from their job ads and instead look for permanent workers. Others are abandoning their requirements to obtain a university degree.
"Absolutely we see employers becoming increasingly creative about ways to get people in," Frankiewicz said.
According to some measures, consumers are the most trusted in 18 years, and their spending is driving rapid economic growth. The economic expansion is now the second longest recorded, and October marked the 97th consecutive month of hiring, a record streak.
The strength in the demand of its customers has been a key factor that has led companies to incorporate workers constantly. Although economists have predicted that hiring will eventually decrease as the number of unemployed Americans decreases, there are no signs that this will happen yet.
However, the last month of healthy job growth may not give many votes in the midterm elections. Surveys have suggested that while Americans generally approve of the economy's performance, sentiment has not necessarily expanded support for the president. Donald Trump or for the Republican Congress candidates.
Strong job growth and higher wage increases will encourage the Federal Reserve to continue raising interest rates in the short term. Most analysts expect the Fed to resume its rate hikes in December.
Hurricane Michael, which crashed into the Florida Panhandle and southern Georgia last month, had no discernible effect on employment data, the government said. Still, the October increase in size may have reflected, in part, a rebound in September, when Hurricane Florence depressed job growth.
The hiring in October was strong in medium and high income jobs. Professional and business services, including engineers, architects and accountants, obtained 35,000 jobs. Manufacturers added 32,000 after two months of smaller gains, defying fears that Trump's commercial fights would slow hiring in that sector. The construction companies added 30,000 positions.
Retailers barely hired, adding only 2,400 positions, possibly reflecting Sears bankruptcy. Restaurants and hotels earned 33,000, most of which paid less.
In the July-September quarter, consumer spending grew more in four years and helped the economy expand at an annual rate of 3.5 percent. This growth continued at an annual rate of 4.2 percent in the April-June quarter. Combined, the two quarters produced the strongest six-month growth in four years.
Housing remains a weak point in the economy, as existing home sales have fallen for six consecutive months, as mortgage rates have risen to almost 5 percent. But slower sales have begun to limit increases in housing prices, which have been running at more than double the pace of wage gains.
While wage increases can help boost spending and boost economic growth, they can also lead companies to raise prices to cover their higher labor costs. That trend, in turn, can accelerate inflation.
So far, however, inflation remains under control. The Federal Reserve's preferential price measure increased 2 percent in September compared to the previous year, slightly lower than the year-on-year increase in August.
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This story has been corrected to show that teenagers' unemployment fell to its lowest level since 1969 last month, not the lowest recorded.
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