United States records strong jobs gains in October

Donald Trump

In this June 21 photo, Jordan Caldwell buses tables at the MOD Pizza West Galleria location, in Houston. The proportion of people without a high school diploma who are now working is the highest on records dating to 1992.

- USA employers added a stellar 250,000 jobs last month and boosted average pay by the most in almost a decade in an effort to attract and keep workers. Unemployment at 3.7%. Wages UP!" he wrote on Twitter, telling reporters later in the day: "We had tremendous job numbers today.

All eyes were on the United States jobs report before the open, which showed hiring picked up more than expected in October.

The wage gains are coming at a time of record profits for USA companies after Trump and congressional Republicans enacted the biggest corporate tax rate cut in the nation's history.

"The moderate improvement in wage growth keeps the Fed on track to hike again in December, and enables them to transition to a slower pace of rate increases next year", economist Mickey Levy of Berenberg Capital Markets said before the report was released. The U.S. economy is in its 10th year of expansion, the second-longest such period on record, and October marks the 100th straight month of hiring, a record streak.

The resulting strength in customer demand has led companies to steadily add workers. Though economists have predicted that hiring will eventually slow as the pool of unemployed Americans dwindles, there's no sign of that happening yet.

"Tax relief is helping our economy grow and Iowans are keeping more of their hard-earned money", Rep. David Young, R-Iowa, who is in one of the most competitive House races in the country against Democrat Cindy Axne, tweeted Friday after the jobs numbers came out.

The strong job growth and bigger pay increases will likely encourage the Federal Reserve to keep raising short-term interest rates. However, Hurricane Michael, which hit Florida and Georgia last month, will have had a detrimental impact on payrolls in that region through worker absence.




Chair of the Council of Economic Advisers Kevin Hassett will join FOX Business' Stuart Varney at 9:30 a.m. ET for a full analysis of the latest data and what it means for USA workers and the economy.

So far, manufacturing hiring does not appear to have been affected by the Trump administration's protectionist trade policy, which has contributed to capacity constraints at factories.

Construction employment rose by 30,000 in October, with almost half of the gain occurring among residential specialty trade contractors. Retailers created 2,400 jobs following a 32,400 decline in September. Businesses as big as Amazon often have margins that allow them to raise pay without blowing up prices, some economists say. In good news for the president, wages grew at their fastest rate for close to a decade. In the early 2000s and late 1960s, wages for nonsupervisors, for which more years of data are available, were growing at a 4%-or-better annual pace.

Americans boosted their spending by the most in almost four years in the July-September quarter. Higher tariffs on Chinese imports have raised costs for many manufacturers.

If individual workers don't produce more, it is hard for employers to justify pay increases that exceed price increases. This is the first time that the 12-month growth in nominal average hourly earnings exceeded 3 percent since April 2009.

There is some concern that higher wages might fuel inflation if companies turn around and increase prices for consumers.

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

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