Wages, U.S. job total rise; unemployment rate falls
Workers enjoyed their best pay raises in seven years last month as employers added 161,000 jobs, the government said in the last major snapshot of a slow but durable economy before Americans choose a new president next week.
Friday’s report sketched a picture of a resilient job market that likely keeps the Federal Reserve on track to raise interest rates when it meets next month. Yet the economy remains pocketed by weaknesses that have left many feeling left behind on the eve of Election Day. Job gains have been steady, but pay raises have only recently become widespread. And millions of Americans are working part time but would prefer full-time work.
In October, the unemployment rate dipped to 4.9 percent from 5 percent, and the government said employers added more jobs in August and September than it had previously estimated.
An alternative gauge of joblessness that counts not only the officially unemployed but also the parttimers who’d prefer fulltime work and people who have stopped looking for jobs, fell to 9.5 percent. That’s the lowest point since 2008. Still, it is higher than is typical in a healthy economy.
Average hourly pay took a big step up in October, rising 10 cents an hour to an average of $25.92. That is 2.8 percent higher than a year ago and is the sharpest 12-month rise in seven years.
“If you wanted to show that the economy is still getting better for the typical voter, this report gives you what you needed,” said Jed Kolko, chief economist with Indeed, the job site.
The pickup in pay follows a substantial increase last year in earnings for the typical household. The economy appears to be finally delivering widespread raises after years of sluggish pay gains. With the unemployment rate hovering around healthy levels, businesses are likely having to try harder to attract workers.
When businesses are forced to offer higher pay, they may raise prices to cover the costs, potentially boosting inflation. That dynamic has helped make a Fed rate hike likely in midDecember.
“The only remaining obstacle to the Fed hiking in December would be a significant adverse financial market reaction to the US presidential election,” Chris Williamson, an economist at IHS Markit, wrote in a research note.
Friday’s report said employers added 44,000 more jobs in August and September combined than it had earlier estimated. That put recent hiring in line with this year’s solid, if less-than-robust, pace. In September, it had appeared that hiring was slowing.
Americans in their prime working years — ages 25 through 54 — extended a recent trend of returning to work, perhaps drawn by rising pay. More than 78 percent of people in that age bracket now have jobs, the highest proportion since November 2008, in the midst of the Great Recession. Still, that’s down from 80 percent before the downturn.