Economy

US Adds More Jobs for August as Wage Growth Rises

US Adds More Jobs for August as Wage Growth Rises

The U.S.jobs market is humming along, with hiring picking up in August and paychecks growing whole the unemployment rate held steady.

Employment declined 3,000 in manufacturing but showed little change in other major industry sectors.

Economists surveyed by Bloomberg expected 195,000 payroll gains.

USA employers likely hired at a healthy pace in August, emboldened by brisk consumer spending and an economy that keeps growing steadily. The latest figure reflects a decrease of 46 000 unemployed people in August and a 423 000 drop in the number of people with jobs. That makes it more challenging for Labor to adjust the employment totals to account for seasonal variations.

U.S. employment has risen for 95 consecutive months, the longest jobs-expansion streak on record.

The payroll gain ends a seven-year streak where the first reading for August has been below the median analyst estimate.

In early July, the Trump administration slapped tariffs on $34 billion in Chinese imports and announced a proposed list of tariffs on another $200 billion in Chinese goods.

Average hourly earnings rose 0.4 percent from the prior month following a 0.3 percent gain, the report showed.

"More Americans have jobs and wages are rising". In particular, the Fed may view the increase in wages as a sign inflation is picking up.

USA businesses added 204,000 jobs while federal, state and local governments lost 3,000.

Nonfarm payrolls surged by 201,000 jobs last month, boosted by hiring at construction sites, wholesalers and professional and business services, the Labor Department said. Healthcare added 41,000; transportation and warehousing, 20,000; and leisure and hospitality, 17,000.

Job gains in August were nearly across all sectors, though manufacturing payrolls fell by 3,000.

U.S. construction companies hired 23,000 more workers last month. Of those, 1.3 million have been out of work for 27 weeks or longer.

Interestingly, the pay gains are not especially strong in areas where employers have been complaining about labor shortages. Between April through June, GDP grew at 4.2 percent - the highest rate in four years.

The White House has not yet offered an explanation for why job growth has slowed. But monthly additions are still averaging a muscular 207,000 this year.

Perhaps most assuring for market participants was the fact that wage growth jumped back up to +2.7% y/y, the highest pace since May 2009. Some economists fear the stimulus will push up long-term interest rates and crimp economic growth by 2020.


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