United States wage growth hits nine-year high

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The unemployment rate remained at 3.9 percent, near an 18-year low. On the positive side, however, the number of full-time jobs in August rose by 40,400.

- U.S. wage growth increased to+2.9% y/y, ending the recent streak of negative real wage growth.

Still, after adjusting for inflation, pay has been flat for the past year.

The unemployment rate held steady at 3.9 percent the Labor Department reported on Friday.

Perhaps most assuring for market participants was the fact that wage growth jumped back up to +2.7% y/y, the highest pace since May 2009.

The jobs data topped economists' estimates: Bloomberg had put the median projected gain at 191,000 jobs, while the Marketwatch median forecast stood at 200,000.

Average hourly wage growth, which is closely watched by the Bank of Canada, continued its gradual slide last month to 2.9 per cent after expanding 3.2 per cent in July and 3.6 per cent in June.

Annual wage growth hit a nine-year high in the U.S. last month as the economy created more jobs than expected. The government imposed import duties on goods including steel, aluminum, washing machines, lumber and solar panels early this year to protect American industries from what Trump says is unfair foreign competition.

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USA employers sped up their hiring in August, reversing several months of slowing gains.

Yet so far, those concerns don't appear to have depressed overall hiring. Businesses are increasingly reluctant to even lay off workers, in part because it would be difficult to replace them at a time when qualified job applicants have become harder to find. Most industries expanded, with particular job growth in health care, education, business and professional services, hospitality and construction.

Hiring has been strong in almost every industry this year from manufacturing to health care.

Update: Here's another chart, this one showing monthly job losses/gains in just the private sector since the start of the Great Recession. Retailers cut 6,000 positions, a surprising drop given reports of strong sales by such leading retailers as Target, Walmart and Best Buy. Between April through June, GDP grew at 4.2 percent - the highest rate in four years. That said, this year's tally is still short of the totals from the first seven months of 2014 (1.9 million) and 2015 (1.75 million).

Consumer confidence rose in August to its highest level in almost 18 years. Both numbers reflect a very healthy job market.

Today's United States employment report added to manufacturing and services industries surveys in suggesting the Trump administration's protectionist trade policy was having a marginal impact on the economy for now.

"We do, however, expect it to reach a new high of 2.9 percent by the fourth quarter", said Lou Crandall, chief economist at Wrightson ICAP in Jersey City.

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