U.S. adds robust 250,000 jobs; pay growth fastest since 2009

Justin Sullivan  Getty Images North America

Justin Sullivan Getty Images North America

The Labor Department said Hurricane Michael, which struck the Florida Panhandle in mid-October, "had no discernible effect on the national employment and unemployment estimates for October". Nominal average hourly earnings rose by 3.1 percent over the past 12 months.

Wage growth could give businesses some leeway to raise prices, but workers' paychecks should continue to grow above the rate of inflation, said Dan North, chief economist at Euler Hermes North America.

Strong annual wage growth would mirror other data published this week showing wages and salaries rising in the third quarter by the most since mid-2008. An estimated 711,000 people joined the labor force last month.

Average hourly earnings for all private workers hit US$ 27.30 in October, up 83 cents from a year earlier.

Kinestral Technologies Inc., which engineers and manufactures smart-tinting windows for homes and commercial buildings, has added about six people to its US staff of just more than 100.

Employers, scrambling to find qualified workers, are boosting wages.

The country has 7.1 million job openings, a record high, the Labor Department announced Tuesday.

It's likely that the October wage figure was slightly inflated because the severe hurricanes past year ended up depressing wages.

Wages are also rising. The economy expanded 3.5 percent, though most economists forecast growth will fall below 3 percent in the final three months of this year.

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That is seen supporting the economy through at least early 2019 when gross domestic product is expected to significantly slow as the stimulus from the Trump administration's $1.5 trillion tax cut package fades. The rate slightly decreased to 7.4 percent in October when counting people who sought a job in the past year and also those with part-time jobs in want of a full-time one.

According to a report last week from the research arm of the payroll processing firm ADP, for instance, American workers are earning almost $1 more per hour on average than they were a year ago. The prime-age employment-to-population ratio, which looks at the share of the civilian non-institutional population who are employed, increased this month by 0.3 p.p. among men to 86.2 percent, and by 0.5 p.p. among women to 73.4 percent. Retailers created 2,400 jobs following a 32,400 decline in September. Construction companies added 30,000 positions. "This job market has more room to run", said Ryan Sweet, head of monetary policy research at Moody's Analytics Inc.in West Chester, Pennsylvania.

"Faster wage growth along with a remarkably strong employment report in October will certainly lend some support to the hawks".

Last month, the construction, manufacturing and transportation and warehousing sectors added jobs at an increased rate. Healthcare and social services employers added 46,700 jobs, up from a gain of 34,900 in September.

Further gains are anticipated in manufacturing jobs after the sector added 18,000 positions in September, but a measure of factory employment fell last month suggesting some slowdown in the pace of hiring.

The United States is locked in a bitter trade war with China that has led to tit-for-tat tariffs.

Despite the protectionist measures, the trade deficit continues to deteriorate.

The jobs report comes after US stocks were hammered throughout the month of October, with the tech-heavy Nasdaq Composite falling roughly 9 percent over the month as weak earnings reports hurt industry leaders such as Amazon and Google's parent company, Alphabet.

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