Published: Mon, November 05, 2018
Markets | By Jeffery Armstrong

US adds 250,000 jobs in October

US adds 250,000 jobs in October

For Republicans, the good news about the economy has mostly been drowned out during the election campaign by Trump's focus on immigration and his attacks on Democrats, both of which energize the president's core supporters.

- USA employers added a stellar 250,000 jobs last month and boosted average pay by the most in almost a decade in an effort to attract and keep workers.

There were also big gains in manufacturing, construction and professional and business services payrolls.

The economy brushed past Hurricane Michael, adding 250,000 net new positions in October and handily overshooting forecasts, while salaries rose at the fastest pace in almost a decade, the Labor Department said.

Hassett predicted strong wage growth would "move even higher" than 3.1 percent next year as companies use their tax savings to invest more in factories, machines and other items that make workers more productive.

The two reports also respond differently to hurricanes. 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.

Employers also increased hours for workers last month.

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This incredibly tight labour market story is increasingly evident in the wage data with average hourly earnings jumping to 3.1% year-on-year from 2.8% in September.

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. (A move at the next meeting on November 7-8 is a long shot, with only a 10.5% probability.) The odds still also favor a second 25-basis-point increase from here by mid-2019, but it's only even-money odds for a third. Hourly wages rose 5 cents for the period, to $27.30.

The labor force participation rate increased by 0.2 percentage point to 62.9 percent in October. That was expected, partly because wage growth was weak last October. The last time this occurred was over a year ago (June 2017).

Some economists said Fed officials were likely to view the low unemployment and rising wages as modestly inflationary.

Kinestral Technologies Inc., which engineers and manufactures smart-tinting windows for homes and commercial buildings, has added about six people to its USA staff of just more than 100.

Employers know this well, as they continue to struggle to fill openings.

The country now has 7.1 million job openings, a record high, the Labor Department announced Tuesday.

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Wages jumped. Average monthly earnings increased 3.1 percent from the year before, the first time in the current economic expansion that the figure has crossed the 3 percent mark. After revisions, job gains have averaged a robust 218,000 over the past three months, well above the gain needed to keep up with population growth.

"The fact is that there's 1.3 million people who were so discouraged that they weren't in the labor force that are back in and majority have a job now". All levels of government added 4,000 jobs from public payrolls last month.

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

Although pay increases can help boost spending and propel the economy's growth, they can also lead companies to raise prices to cover their higher labor costs.

Job growth in the United States slowed considerably in September, largely because of Hurricane Florence's devastating run through the Carolinas.

Last month, the economy added 47,000 jobs in health care, 42,000 in leisure and hospitality, 32,000 in manufacturing, 30,000 in construction and almost 25,000 in transportation and warehousing. Job gains in the sector, which accounts for about 12 per cent of the US economy, could slow after a survey on Thursday showed a measure of factory employment fell in October.

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