US Wages, Salaries Rise by Most in 10 Yrs, 227,000 Jobs Added

Daniel Fowler
November 3, 2018

That pushed the annual increase in wages and salaries to 2.9 percent, the biggest gain since September 2008, from 2.8 percent in the year to June. From September of 2016 to September of 2017, wages and salaries rose 2.5 percent, the Labor Department said.

Employment costs also rose in Q3, up 0.8 percent for the period, ahead of the estimate of 0.7 percent Wall Street economists projected, a sign that more inflation is ahead.

Wages and salaries for civilian workers increased almost 1 percent, while benefits costs jumped 0.4 percent.

As reported by Reuters, median market forecasts are anticipating a healthy uptick in reported jobs, as well as wage increases, which could spur the US Federal Reserve to even more rate hikes in the near future.

USA employment costs rose by more than forecast in the third quarter as increases in private wages and salaries accelerated, indicating workers are gaining leverage in a tightening labor market. That was the strongest year-over-year gain since the second quarter of 2008.

USA private sector payrolls increased by the most in eight months in October, suggesting overall job growth accelerated this month after Hurricane Florence weighed on restaurant and retail employment in September.

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With 3.7 percent unemployment, some economists view the jobs market as being close to or at full employment.

Sluggish pay growth has been one of the biggest problems in this recovery, but employers are finally having to raise wages at a more normal level typically seen during good economic times.

Prices also have been rising in the past year, especially for gas and rent, but wages are outpacing inflation by a significant margin. There are a record 7.1 million job openings in the economy. They were up 2.6% in the 12 months through September after rising 2.9% in the year to June. The Conference Board, which produces the gauge, attributed the positive assessment to a strong labor market.

The government's quarterly ECI reading - which covers employer- paid taxes such as Social Security and Medicare in addition to the cost of wages and benefits - offers a glimpse at how American workers are being compensated.

Economists and investors expect the Fed to continue gradually raising interest rates, including a December increase that would be the year's fourth.

But benefits for all workers increased only 0.4 percent in the July-September quarter after rising 0.9 percent in the second quarter. It is not a solicitation to make any exchange in commodities, securities or other financial instruments.

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