ibusinesslines.com December 17, 2018

USA job growth expected to accelerate with strong wage gains

03 November 2018, 03:30 | Kelvin Horton

USA job growth expected to accelerate with strong wage gains

USA job growth expected to accelerate with strong wage gains

In the breakdown of the index, private-sector wages and and salaries jumped 3.1 percent over the 12-month period ending in September, the biggest annual increase since 2009.

Wages and salaries were up 2.9 percent in the 12 months through September, according to data released Wednesday by the Department of Labor.

The employment cost index, which tracks the hiring cost for USA employers quarterly, rose 0.8 percent during the third quarter, beating the estimated 0.7 percent that economists surveyed by Refinitiv ahead of Wednesday's release predicted.

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

The strong jobs market is gradually putting upward pressure on compensation, with other data Wednesday showing a solid increase in labor costs in Q-3.

Following a robust third fiscal quarter, wages and salaries in the US are up by 0.9 percent this month so far - 3.1 percent this year - which is the highest level in a decade. That followed a 2.9 percent gain in the year to June.

Benefits for all workers increased 0.4 percent in the July-September quarter after rising 0.9 percent in the second quarter. The jobs market is viewed as being close to or at full employment, with the unemployment rate at a near 49-year low of 3.7 percent.

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. He added that the gains are a "testimonial to the robust employment picture is the broad-based gains in jobs across industries".

But the acceleration in employment growth was likely tempered by Hurricane Michael, which struck Florida in mid-October.

"How hot is the labor market?" It is also considered a better predictor of core inflation.

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.

The unemployment rate fell to 3.7 percent in September, the lowest level since 1969.

Average hourly earnings are forecast rising 0.2 percent in October after advancing 0.3 percent in September.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc.

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