Why pay raises are elusive even with U.S. jobless so low

WASHINGTON — With U.S. unemployment at a 17-year low and businesses complaining that they can’t fill jobs, you might expect pay to be rising sharply as companies try to attract or keep workers.

It’s not. The October jobs report showed that pay gains remain sluggish, and the explanations include weak worker productivity and a still-low proportion of adults with jobs. These are long-running trends that still bedevil the economy despite its steady improvement.

Employers added a solid 261,000 jobs last month, the government said Friday, in part because many businesses in Texas and Florida re-opened after having been forced to shut down in September when Hurricanes Harvey and Irma struck.

The unemployment rate reached 4.1 percent, the lowest level in nearly 17 years, from 4.2 percent in September. But the rate dropped for a less-than-encouraging reason: Many people stopped looking for work and so were no longer counted as unemployed.

Still, Friday’s data showed that the hurricanes, for all their fury, hardly knocked the economy or the job market off course. Over the past three months, job growth has averaged 162,000— similar to the pace of hiring before the storms.

“Looking through the volatility from the hurricanes, the U.S. job market is in good shape,” said Gus Faucher, chief economist at PNC Financial.

Normally, with the unemployment rate

ultra-low, businesses are forced to raise pay significantly to fill jobs or to retain existing employees. The last time the jobless rate was this low, in 2000, average hourly pay was surging at a 4 percent

annual pace.

Then was then. In October, by contrast, wages crept up just 2.4 percent from a year earlier, the government said Friday. Though that’s double the pace of five years ago, it’s nearly a half-point less than the year-over-year rate in September.

It’s particularly surprising

given that some employers say they’re desperate to hire. Mike Bolen, chief executive of McCarthy Building Companies in St. Louis, said he needs more electricians, carpenters, and laborers, as well as engineers, marketing and IT support. McCarthy has 16 offices and employs 4,000.