US job growth rebounds; strong annual wage gain expected

Loredana Gonzalez of Doral Fla. fills out a job application at a JobNewsUSA job fair in Miami Lakes Fla. On Friday Nov. 2 the U.S. government issues the October jobs report

Loredana Gonzalez of Doral Fla. fills out a job application at a JobNewsUSA job fair in Miami Lakes Fla. On Friday Nov. 2 the U.S. government issues the October jobs report

Sustained labour market strength could ease fears about the economy's health following weak housing data and stalling business spending.

"These are incredible numbers", President Donald Trump commented in a November 2 morning tweet.

New data released by the Bureau of Labor Statistics (BLS) shows that nonfarm payroll employment rose by 250,000 jobs in October, far exceeding expectations by 50,000 jobs.

There were also big gains in manufacturing, construction and professional and business services payrolls.

The US added 250,000 jobs in October - the last jobs report before Donald Trump's first midterm elections.

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. That boosted the annual increase in wages to 3.1 per cent, the biggest gain since April 2009, from 2.8 per cent in September.

Bernie Sanders, I. -Vermont, Amazon last month said it would raise its minimum wage to $15 an hour. Hourly compensation also increased at a brisk pace in the third quarter. According to estimates by Shipley of Evercore ISI, the replacement of retiring baby boomers, who likely were in their peak earnings years, with lower-paid, younger workers is depressing the annual rise in average hourly earnings by some 0.6 percentage point. The average workweek rose to 34.5 hours from 34.4 hours in September.

The labor force participation rate also ticked up in October to 62.9%, a 0.2% increase from September.

The Fed is not expected to raise rates at its meeting next Wednesday, but economists believe strong labor market data could see the U.S. central bank signal an increase in December. The last time this occurred was over a year ago (June 2017).

Employment in other major industries, including wholesale trade, retail trade, information, financial activities, and government, showed little or no change over the month.

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

Many of employers' most recent hires had struggled through much of the nation's 10-year recovery from the Great Recession.

The country has 7.1 million job openings, a record high, the Labor Department announced Tuesday. The continued hiring and wage increases also reflect a tax-cut boost and reinforce expectations that the central bank will raise interest rates for a fourth time this year in December, though such an outlook may further unsettle investors who just sent USA stocks to their worst month since 2011.

The jobs report comes after USA 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.

The number of people working or looking for a job increased by 711,000, nudging the labor force participation rate up to 62.9 percent, from 62.7 percent in September.

Although voters see the economy as one of the top issues that will determine who they favor for in the midterm elections, according to Pew Research, analyses of past midterms show that partisan views tend to overwhelm the objective performance of the labor market.

The share of the population in the workforce also rose 0.2% to 60.6%.

The monthly average job creation now stands at about 180,000 for the last three months.

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