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September 07, 2018 @ 19:49 +03:00
U.S. job growth accelerated in August and wages notched their largest annual increase in more than nine years, the clearest signs that the economy was so far weathering the Trump administration’s escalating trade war with China. The Labor Department’s closely watched employment report published on Friday also showed slack in the jobs market was rapidly diminishing, with a broader measure of unemployment falling to a level not seen since 2001. The report cemented expectations for a third interest rate increase from the Federal Reserve this year when policymakers meet on Sept. 25-26.
Analysts say the administration’s $1.5 trillion tax cut package and increased government spending were shielding the economy from the trade tensions, which have also seen Washington engaged in tit-for-tat tariffs with other trade partners, including the European Union, Canada and Mexico. Nonfarm payrolls surged by 201,000 jobs last month, boosted by hiring at construction sites, wholesalers and professional and business services, the Labor Department said. There were also gains in transportation and healthcare employment. Average hourly earnings increased 0.4 percent, or 10 cents in August after rising 0.3 percent in July. That raised the annual increase in wages to 2.9 percent in August, the largest gain since June 2009, from 2.7 percent in July.
Wage growth has been the labor market’s Achilles heel and last month’s increase fit in with economists’ expectations that inflation will continue to bounce around the Fed’s 2 percent target for the remainder of this year and into early 2019. The unemployment rate was unchanged at 3.9 percent. Economists polled by Reuters had forecast nonfarm payrolls increasing by 191,000 jobs last month and the unemployment rate falling to 3.8 percent. The economy created 50,000 fewer jobs in June and July than previously reported. Job growth averaged 185,000 per month in the past three months. The economy needs to create 120,000 jobs per month to keep up with growth in the working-age population.