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US wage growth hits nine-year high US wage growth hits nine-year high
(about 1 hour later)
Wages in the US grew at their fastest pace for nine years last month, according to the latest official figures.Wages in the US grew at their fastest pace for nine years last month, according to the latest official figures.
The US Labor Department said wages grew at an annual rate of 3.1% in October, accelerating from a rate of 2.8% the month before.The US Labor Department said wages grew at an annual rate of 3.1% in October, accelerating from a rate of 2.8% the month before.
The economy also added 250,000 jobs last month, which was well ahead of analysts' expectations.The economy also added 250,000 jobs last month, which was well ahead of analysts' expectations.
The unemployment rate remained unchanged at 3.7%.The unemployment rate remained unchanged at 3.7%.
Most sectors of the economy saw job gains, the Labor Department figures show.Most sectors of the economy saw job gains, the Labor Department figures show.
The healthcare sector added 36,000 jobs, manufacturing 32,000 and construction 30,000.The healthcare sector added 36,000 jobs, manufacturing 32,000 and construction 30,000.
Employment in the leisure and hospitality sector rose by 42,000 last month. That followed no change in September, which the Labor Department said was probably due to the impact of Hurricane Florence.Employment in the leisure and hospitality sector rose by 42,000 last month. That followed no change in September, which the Labor Department said was probably due to the impact of Hurricane Florence.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: "In short, the labour market continues to tighten. Nothing in this report will make the Fed think that skipping the December [interest rate] hike is a good idea." On average, the US economy has added 218,000 jobs a month over the last three months - well above the rate needed to keep up with population growth.
'Landmark' report
The report is likely to bolster confidence in the trajectory of the US economy, despite concerns that weakness may be emerging in sectors such as housing and trade.
The wage gains also signal that the benefits of the strong labour market are finally being passed onto the average worker, economists said.
Average hourly earnings for all private workers hit $27.30 in October, up 83 cents from a year earlier. That marked the strongest annual rise since April 2009.
"Today's jobs report is a landmark in the long recovery since the Great Recession, showing the power of a tight labour market to raise pay for American workers if allowed to run hot for a sufficiently long time," said Andrew Chamberlain, chief economist at the job website Glassdoor.com.
Rate rise
Economists said the strong report all but guarantees that the US central bank will raise interest rates again before the end of the year.
The Federal Reserve last raised rates in September, bringing the target for the bank's benchmark rate to a range of 2%-2.25%.The Federal Reserve last raised rates in September, bringing the target for the bank's benchmark rate to a range of 2%-2.25%.
The move was the bank's eighth rate rise since 2015, continuing its policy of gradual increases.The move was the bank's eighth rate rise since 2015, continuing its policy of gradual increases.
However, US President Donald Trump has criticised the Fed's actions. When asked last month by the Wall Street Journal about what he saw as the biggest risks to the US economy, Mr Trump said: "To me the Fed is the biggest risk, because I think interest rates are being raised too quickly". Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: "In short, the labour market continues to tighten. Nothing in this report will make the Fed think that skipping the December [interest rate] hike is a good idea."
The Fed has said the increases are intended to head off uncontrolled inflation.
However, US President Donald Trump has criticised the Fed's actions, saying he is worried they will be a drag on growth.
When asked last month by the Wall Street Journal about what he saw as the biggest risks to the US economy, Mr Trump said: "To me the Fed is the biggest risk, because I think interest rates are being raised too quickly."