USA employers added a stellar 250,000 jobs last month and raised average pay by the most in almost a decade.
Stock and bond prices moved lower after the Bureau of Labor Statistics issued a strong-than-expected employment report for October, which bolsters the case for the Federal Reserve to push ahead with interest-rate increases this year and next.
On the wages front, last month's 3.1% growth rate after years of stagnant paychecks was somewhat inflated since wages declined in October 2017 as low-wage workers returned to their jobs following a particularly strong hurricane season. September's payrolls were depressed by the hurricane that hit the southeast USA that month; those numbers were revised down to a gain of 118,000 from 134,000 originally estimated.
In the July-September quarter, consumer spending grew by the most in four years and helped the economy expand at a 3.5 percent annual rate. Average hourly earnings rose 0.2% in October, putting the year-over-year gains in pay at 3.1% compared with a year earlier.
"We're going to continue to see solid job gains". 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. Hispanic unemployment reached its lowest rate ever, at 4.4%.
Manufacturing employment increased by 32,000 jobs in October after adding 18,000 positions in September.
October's report, however, is among several recent signs that wage growth is picking up.
Some economists said Fed officials were likely to view the low unemployment and rising wages as modestly inflationary. The continued hiring and wage increases also reflect a tax-cut boost and reinforce expectations that the central bank will raise interest rates for a fourth time this year in December, though such an outlook may further unsettle investors who just sent United States stocks to their worst month since 2011. But for now, inflation remains right around the Federal Reserve's target of 2 percent. The government said the USA has not created as many manufacturing jobs in October since 1998. Americans increased their spending by 4 percent in the July-September quarter, the biggest acceleration in almost four years.
"A tight labor market causes employers to compete for the workers they want to attract and retain, and one way they compete is on salary", Adams said.
That, in part, reflects that inflation was higher in those periods, but also that worker productivity was growing more rapidly.
"Average wages are finally starting to pick up, especially for some lower-skilled positions", said Andrew Chamberlain, chief economist at Glassdoor. Among the major worker groups, the unemployment rates for adult men (3.5 percent), adult women (3.4 percent), teenagers (11.9 percent), Whites (3.3 percent), Blacks (6.2 percent), Asians (3.2 percent), and Hispanics (4.4 percent) showed little or no change in October. "A awful idea", he said, adding that pay restrictions hurt small businesses. "That translates into more consumer consumption and a handsome picture in terms of growing the economy into next year".
"Businesses tend to pass on higher costs by raising the costs of the things that they sell".
Restaurants and bars - an industry where most workers only get paid if they show up to work - saw an increase of 33,500 in payrolls, following a 10,000 decrease in September that reflected Florence's impact.