Employers are paying out in wages and salaries 3.1 percent more than a year ago—a record growth for this decade, according to third quarter data for the private sector.
The increase signals a growing effort by employers to keep their workers in a vigorous economy with unemployment at its lowest since 1969.
Benefits increased 2.5 percent in the private sector, the Bureau of Labor Statistics (BLS) reported Oct. 31.
For state and local government workers, the figures are the same, but switched, with wages growing by 2.5 percent and benefits by 3.1 percent.
The largest wage hike was in transportation and warehousing at 4.3 percent. Production, transportation, and material moving, as well as sales and related jobs, went up by 4 percent.
The smallest wage growth, 1.6 percent, was in natural resources, construction, and maintenance jobs.
The private sector added 227,000 jobs in October, Automatic Data Processing (ADP) reported Oct. 31, beating analysts’ expectations. (pdf)
Manufacturing expanded by 17,000 jobs and construction gained just as many.
The ADP report is jointly produced with Moody’s Analytics. The official job growth data from the BLS is expected on Nov. 2.
“The strength in the ADP report supports our view that the underlying trend in the labor market remains upbeat,” said Daniel Silver, an economist at JPMorgan in New York.
But the acceleration in employment growth was likely tempered by Hurricane Michael, which struck Florida in mid-October.
The economy grew at an annual pace of 3.5 percent in the third quarter, after the blockbuster 4.2 percent in second quarter, GDP data shows. Only twice since 2006 has the economy spurred faster in half a year.
The dollar rose to a 16-month high against a basket of currencies, while U.S. Treasury prices fell. Stocks on Wall Street rallied, with the S&P 500 and the Nasdaq on track to post their first two-day gain this month.
Rising wages should help support consumer spending and soften the hit to the economy from a softening housing market and stalling business investment.
With 3.7 percent unemployment, some economists view the jobs market as being close to or at full employment. There were a record 7.1 million job openings in the economy in August, compared with only some 6.2 million unemployed.
The unemployment rate leaves out workers who haven’t sought a job in the past four weeks. The rate was actually 7.5 percent in September, when counting people who sought a job in the past year and also those with part-time jobs in want of a full-time one.
Reuters contributed to this report.