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By Lucia Mutikani
WASHINGTON (Reuters) – US job growth accelerated in August and wages recorded their largest annual increase in more than nine years, a clear sign that the economy has been booming. until now overcame the trade war with China.
The Labor Department's employment report released on Friday also showed that the labor market was shrinking rapidly, with a broader measure of unemployment falling to a level unmatched since 2001. The report has heightened expectations this year, when decision-makers will meet from 25 to 26 September.
According to analysts, the $ 1.5 trillion tax reduction package and the increase in public spending protected the economy from trade tensions, prompting Washington to impose preferential tariffs on other trading partners , including the European Union, Canada and Mexico.
"With tax cuts and spending increases creating a high level of sugar, there is little reason to expect a drop in labor demand for the rest." of the year or even the first half, "said Joel Naroff, chief economist of Naroff Holland, Pennsylvania.
Non-farm payrolls increased 201,000 jobs last month, boosted by hires on construction sites, wholesalers and professional and commercial services, the Labor Department said. Gains were also recorded in the transport and employment sector in the health sector. Click https://reut.rs/2oOs0cX to learn more about US wage growth that accelerated in August.
Average hourly earnings rose 0.4%, or 10 cents in August, after rising 0.3% in July. This brought the annual rise in wages to 2.9% in August, the largest increase since June 2009, after 2.7% in July.
Wage growth was the Achilles heel of the labor market and the rise last month was in line with economists' expectations that inflation would continue to rebound around the Fed's 2% target for the rest this year and early 2019.
"Even if we were witnessing a reversal of monthly wage gains, unless a collapse, current levels support the Fed's 2% symmetrical inflation target," said Marvin Loh, Senior Global Strategist at BNY Mellon in Boston. "The market is expecting a new rise in September." Click https://reut.rs/2wScWhZ for the US unemployment chart, which is the lowest in 18 years.
A broader measure of unemployment, which includes people who want to work but have dropped out of research and those who work part – time because they do not find full – time jobs, dropped by a factor of 5. a tenth to 7.4% in August. since April 2001.
The unemployment rate remained unchanged at 3.9%. Economists polled by Reuters had forecast an increase in non-farm employment of 191,000 jobs last month and a drop in the unemployment rate to 3.8%. The economy created 50,000 fewer jobs in June and July than previously.
Employment growth has averaged 185,000 per month over the past three months. The economy must create 120,000 jobs a month to keep pace with the growth of the working-age population.
The dollar rebounded against a basket of currencies in the report, while US Treasury yields rose. Shares on Wall Street were down.
LIMITED IMPACT OF RATES
The employment report was added to the manufacturing and services surveys suggesting that the protectionist trade policy of the Trump administration was having a marginal impact on the economy at the moment. The economy grew at an annualized rate of 4.2% in the second quarter, almost double the pace of 2.2% between January and March.
Economists have said the import duties applied so far have affected only a small part of the US economy, but warned that this could change if President Donald Trump imposes additional duties on imports. Chinese.
The United States and China have imposed retaliatory duties on $ 100 billion of combined products since early July.
Trump said on Friday that he was ready to impose tariffs on an additional $ 267 billion in Chinese products, in addition to a $ 200 billion tariff schedule that is awaiting his decision. Customs duties on an additional $ 467 billion would increase tariffs on virtually all US imports from China.
At the beginning of the year, the government imposed import duties on goods, including steel, aluminum, washing machines, lumber and solar panels, to protect industries. what Trump says is unfair foreign competition.
"If tariffs on all imports from China come into effect, large layoffs will be inevitable with higher prices," said Sung Won Sohn, chief economist of SS Economics in Los Angeles.
Last month, the labor force participation rate, or the proportion of working-age Americans who are employed or looking for a job, fell by two tenths of a point to 62.7%, a sprained the employment report. For graphs on employment in the US manufacturing sector, click on https://reut.rs/2wTpSUH
Employment gains in August affected almost all sectors, although the manufacturing wage bill declined by 3,000. This was the first decrease in 13 months and followed an 18,000 increase in July. Employment in motor vehicle plants fell by almost 5,000, accounting for the bulk of the decline in payroll in the manufacturing sector.
Employment also declined in machinery, computer and electronic products as well as in the furniture industries.
"This should turn out to be transitory as automaker wages tend to be noisy during the summer months as companies stop producing for next year 's models, making the factors of less accurate seasonal adjustment, "said Joseph Song, an economist at Bank of America in New York.
Construction companies hired 23,000 more workers last month after increasing their payroll by 18,000 in July. Wholesalers added 22,400 jobs. Payroll in the Professional and Commercial Services sectors increased by 53,000.
Employment in sporting goods, hobby, book and music stores rebounded from 9,200 jobs in August, after losing 30,300 jobs in July as a result of the closure of all Toys-R-Us stores. But the payroll dropped by 5,900 and the government cut 3,000 jobs.
(Report by Lucia Mutikani, edited by Andrea Ricci)
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