The Economy

U.S. Adds 250,00 Jobs, Wages Rise 3.1%

The October jobs report is "another reminder of the labor market’s persistent strength even as the stock market has swerved down in recent weeks."
Matthew HellerNovember 2, 2018

The U.S. economy posted an unexpectedly strong gain in jobs in October while average wage growth topped 3% for the first time in nine years.

The Labor Department reported Friday that total nonfarm payroll employment rose by 250,000 last month, well above economists’ estimates of a gain of 200,000.

The unemployment rate was unchanged at a near 50-year low of 3.7% and the civilian labor force participation rate for workers between ages 25 and 54, which measures the percentage of the population that is working or looking for work, jumped to its highest level since May 2010.

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“The continued pace of job growth is unusual at this point in an economic recovery, and shows that there are still enough workers coming off the sidelines as opportunities improve to supply at least a portion of businesses’ labor needs,” CNN said.

Monthly job growth has averaged a robust 212,000 this year, up from 182,000 in 2017, despite low unemployment and related labor shortages that are making it harder for businesses to find workers.

“Businesses have started relaxing their (hiring) standards,” Joel Naroff of Naroff Economic Advisors told USA Today. “They’re being more rational. That’s why we’re seeing sustained strong job growth” despite the smaller supply of available workers.”

On the wages front, last month’s 3.1% growth rate after years of stagnant paychecks was somewhat inflated since wages declined in October 2017 as low-wage workers returned to their jobs following a particularly strong hurricane season.

But Michelle Girard, chief United States economist at NatWest Markets, told The New York Times that “there is an upward trend and evidence in the wage numbers which suggest we’re finally seeing some pickup in wage growth.”

Economists also noted that the pay increase remains well above the inflation rate.

Most of the net new jobs in October came from health care, construction, and manufacturing, which has added 296,000 jobs over the past year.

The October jobs report offers “another reminder of the labor market’s persistent strength even as the stock market has swerved down in recent weeks,” the Times said.