still WINNING
New York (CNN Business)Good news for American jobs: The stellar labor market shows no signs of slowing down.
The Labor Department will release its report on September's jobs gains on Friday, and experts expect employment growth was strong yet again: Economists surveyed by Refinitiv predict the US economy added 185,000 net new jobs last month.
That would be only slightly less than the 194,200 average jobs gained each month over the past year.
Payment processor ADP reported 230,000 jobs added in September. That's the highest since February of this year. The ADP Employment report closely mimics the Labor Department survey but lacks public sector employment. It is not predictive of the Labor Department survey, but it indicates that jobs growth remains strong.
Refinitiv's forecast also predicts the unemployment rate will fall to 3.8% and hourly earnings will grow 2.8% year over year, down from August's earnings growth.
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Investors will watch wage growth closely. Paycheck increases have been the missing piece of an otherwise hot economy. Typically, pay goes up when the labor market reaches full employment, because of supply and demand: There are more jobs than workers to fill them. But wage growth has remained stubbornly low in recent years, and even though more workers are now getting raises, higher inflation makes them worth less.
The job market still has some room for improvement. The labor force participation rate for people in their prime years — a yardstick for all those working or looking or work — has been rebounding since last 2015, but hasn't yet reached its pre-recession level.
A more expansive measure of underemployment, which also includes discouraged workers and those those working part time for economic reasons, is nearing its lowest point on record, October 2000. There's been about one unemployed person per job opening for the past several months.
In August, paychecks grew by 2.9% over the previous year. That gave some economists hope that wages are starting to respond as employers scramble to find workers. But a higher rate is also seen as evidence that it's getting late in the economic cycle, creating fear that the Federal Reserve may hike interest rates more quickly.
"The way that Wall Street is reacting to [wage growth] is the transition in inflation expectations and 'what will the Fed will do,'" says Bryan Besecker, a market strategist at BNY Mellon Investment Management. "The biggest concern to us right now is if the Fed tightens faster than the market is expecting."
https://www.cnn.com/2018/10/05/economy/september-jobs-report/index.html