Surprise hiring spree boosts August’s jobs figures in US
The unemployment rate held steady at an already-low 3.9% and wage gains gained ground on inflation
Washington — Hiring surged in the US in August and employers increased wages by the most in nearly a decade, as the jobs markets showed no sign of slowing, the government reported on Friday.
The unexpected hiring spree, which saw jobs sprout up in construction, transportation, wholesale trade, finance and healthcare, was a shot in the arm for US President Donald Trump, who was beset this week by reports that his staff had actively sought to undermine him.
The US economy added 201,000 new jobs, well above analysts’ expectations, while the unemployment rate held steady at an already-low 3.9% and wage gains gained ground on inflation.
Ahead of crucial elections in November, the White House — which has been at pains this week to counter reports of flagging wage growth — will surely also welcome news that average worker pay grew 2.9% compared to August 2017, the biggest increase since June 2009 and in line with consumer inflation.
But the strong gain in pay will also solidify expectations for the Federal Reserve to continue raising interest rates in 2018 to keep a lid on inflation, something that has drawn Trump’s ire.
And a bright spot for the month was surely the bump in average hourly worker pay, which jumped 10 US cents over July’s rate, about double what economists had been expecting.
The August employment gain appeared even larger, given a downward revision to July’s comparatively weak numbers.
The hiring momentum was not shared by all, however, as jobs in vehicle manufacturing, retail and utilities fell. The labour force participation rate and employment-to-population ratio also weakened slightly.
Analysts had warned that technical factors could produce a deceptively weak reading, since August had more total working days than prior months.
Weak wage increases had threatened to undermine the message of incumbent Republicans ahead of November’s mid-term elections, that December’s sweeping tax cuts would produce dividends for working Americans.