Pay for American workers saw its biggest bump in nearly a decade last month amid a surprise late-summer hiring spree that offered no sign jobs markets could be cooling, the government reported on Friday.
The unexpected job gains, which saw jobs sprout up in construction, transportation, wholesale trade, finance and healthcare, was a shot in the arm for President Donald Trump, who was beset this week by reports his staff had actively sought to undermine him.
The US economy added 201,000 new jobs, well above analyst expectations, while the unemployment rate held steady at an already-low 3.9 per cent and wages gained ground on inflation.
Ahead of crucial elections in November, the White House — which had been at pains this week to counter reports of flagging wage growth — will surely welcome news that average worker pay grew by 2.9 per cent compared to August of last year, the biggest increase since June 2009, and in line with consumer inflation.
But the strong gain in pay will also solidify expectations for the Federal Reserve to continue raising interest rates this year to keep a lid on inflation, something that has drawn Trump’s ire.
Long awaited wage growth
The August employment gain appeared even larger given a downward revision to July’s comparatively weak numbers.
The strong hiring report also brought average gains to 196,000 per month over the past year.
Professional and business services added 53,000, bringing job gains for the sector to 519,000 since August of last year.
The hiring momentum was not shared by all, however, as jobs in auto manufacturing, retail and utilities fell.
The mining sector, an industry central to Trump’s economic agenda, ticked slightly higher with 6,000 jobs added.
The labour force participation rate and employment-to-population ratio also weakened slightly.
The August result is also subject to revision in the coming months.
But the bright spot for the month was surely the bump in average hourly worker pay, which jumped 10 cents over July’s rate to add 0.4 per cent, about double what economists had been expecting and the largest month-to-month increase since December.
Analysts had warned that technical factors could produce a deceptively weak reading since August had more total working days than prior months.
Weak wage increases had threatened to undermine the message of incumbent Republicans ahead of November’s mid-term elections that December’s sweeping tax cuts would produce dividends for working Americans.
AFP
