3 things to know about the August 2018 jobs report
Unemployment stayed steady, while average wages increased.
According to the Bureau of Labor Statistics’ monthly jobs report, average wages saw unexpected growth in August, while the U.S. economy added 201,000 jobs, considerably higher than Bloomberg’smedian estimate of 19,000.
Here are some of the highlights from the report.
1. Unexpected wage growth
Growth in workers’ wages has been a notable weak point in the years since the recession – but this month bucked that trend.
Wall Street Journal: “Average hourly earnings for all private-sector workers increased 10 cents last month to $27.16, a 2.9% increase from August a year ago. That was the strongest year-over-year rise in earnings since the current expansion began in mid-2009.”
Business Insider: “Wage growth, which has been a major laggard of the ongoing economic recovery, was more impressive than forecast. Average hourly earnings increased by 0.4% month-on-month. And at 2.9% year-on-year growth, wages increased at their fastest pace since June 2009.”
CNN Money: “That number is not adjusted for inflation, which has been rising in recent months, so employees can't necessarily buy more than in the past. And it's lower than wage growth rates in previous economic expansions.”
2. Job growth remains strong
This month’s job growth continues a long running trend of solid gains.
MarketWatch: “The United States created 201,000 new jobs in August, keeping the unemployment rate at an 18-year low and generating the fastest increase in worker pay since the end of the Great Recession.”
CNN Money: “Job growth remained steady last month, and the economy has now added jobs for 95 consecutive months. August's job gains slightly beat analysts' expectations, while the unemployment rate remained near historical lows. The job gains for August were roughly in line with the average for the last 12 months, which is 196,000.”
The Washington Post: “This year is on track to be the best for job gains since 2015. The U.S. economy averaged 207,000 jobs a month so far this year, a healthy pace that indicates companies continue to grow and don't anticipate a downturn anytime soon.”
3. The Fed may raise interest rates again in December
The Federal Reserve is expected to raise its benchmark interest rate by a quarter percentage later this month. The increase in wages this month may indicate that it will again before the end of the year.
MarketWatch: “The Federal Reserve is also raising U.S. interest rates and it’s expected to increase them again at the end of September, especially in light of rising wages as shown in the August employment report. Higher pay could put more upward pressure on rising inflation.”
USA Today: “Faster wage gains could prompt the Federal Reserve to raise interest rates more sharply to head off higher inflation, a development that could cool stocks by making less risky bonds relatively more attractive.”
CNBC: “Average hourly earnings increased 10 cents for the month to $27.16. The metric is closely watched as an inflation gauge at a time when the Federal Reserve has been raising interest rates in part to guard against runaway cost pressures. Market participants widely expect the Fed to hike its benchmark rate another quarter point in September and likely add one more increase in December.”
Looking for a new job? Check out these 5 companies hiring this month.