USA economy adds more jobs

USA economy adds more jobs

United States job growth rebounded sharply in October and wages recorded their largest annual gain in 9-1/2 years, pointing to further labour market tightening that could encourage the Federal Reserve to raise interest rates again in December. "Keep it going, Vote Republican!"

"That was a tremendous number by any standards", Trump said.

The economy also added 250,000 jobs last month, which was well ahead of analysts' expectations. Professional and business services, which include engineers, architects and accountants, gained 35,000 jobs. Payrolls rose by 134,000 jobs in September, the smallest gain in a year, after Hurricane Florence drenched North and SC, weighing on restaurant and retail employment.

The unemployment rate remained unchanged at 3.7%. The BLS estimated there was no discernible impact from Hurricane Michael in October, according to Capital Economics. Hourly wages rose 5 cents for the period, to $27.30. Wages grew by 3.1% in October, the best since April 2009.

Average work week increased to 34.5 hours, from 34.4 hours in prior month; a shorter workweek has the effect of boosting average hourly pay. The FOMC's most recent dot-plot chart of forecasts by FOMC members, from its September meeting, has a median projection of a total four quarter-point increases from the current level.

On average, the U.S. economy has added 218,000 jobs a month over the last three months - well above the rate needed to keep up with population growth. Other data released this week shows that compensation costs are now rising more quickly. Hourly compensation also increased at a brisk pace in the third quarter. But Fed policymakers expect growth to slide to 2.5 percent rate next year and to 2 percent in 2020.

Employment gains were widespread, with all industries gaining jobs over the month (see figure below). And a storm-related drop in average wages a year ago, resulting from Hurricane Harvey, helped inflate October's gain. Stocks on Wall Street fell while US Treasury yields rose.

"This is the best labor environment in over a decade", said Joseph Brusuelas, chief economist at RSM U.S., an global consulting firm.

"Wages are firming on a nominal basis for workers", said Ernie Tedeschi, head of fiscal analysis at Evercore ISI and a former economist in the Obama administration.

Wage growth hit an annualized rate of 3.1% in October, the most since 2009.

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His last worldwide appearance was as captain in a 3-0 win over Scotland at Wembley in a 2018 World Cup qualifier in November 2016. It's fitting that the match will be against the US and I hope that both sets of fans enjoy the game".

Wages are also rising.

"What's so impressive to me is there have been more jobs than workers every month since March of this year", said Scott Clemons, chief investment strategist at Brown Brothers Harriman.

According to a report last week from the research arm of the payroll processing firm ADP, for instance, American workers are earning almost $1 more per hour on average than they were a year ago.

About 313,000 people did not clock in at work in September because of the rough weather, according to the Bureau of Labor Statistics.

The share of the population in the workforce also rose 0.2 to 60.6%.

Revisions were a net wash for payrolls in prior two months, as August was revised up 16,000 and September revised down 16,000; three-month average gain of 218,000. Many retailers are removing the label "seasonal" from their job postings and looking for permanent workers instead.

Construction companies hired 30,000 more workers in October. Jobs in the sector have been increasing despite weakness in the housing market.

The job gains were over a broad base of sectors from health care to manufacturing, which economists say is a good sign of growth across the entire economy.

Friday's employment report from the government pointed to a consistently robust job market that shows no sign of flagging even with the economy in its 10th year of expansion. In a separate report on Friday, the Commerce Department said the trade gap increased 1.3 per cent to $54.0 billion in September, widening for a fourth straight month.

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