WASHINGTON — U.S. employers added a stellar 250,000 jobs last month and raised average pay by the most in nearly a decade.
The Labor Department’s monthly jobs report, the last major economic data before Tuesday’s congressional elections, also showed that the unemployment rate remained at a five-decade low of 3.7 per cent.
The influx of new job-seekers in October increased the proportion of Americans with jobs to its highest level since January 2009.
Consumers are the most confident they have been in 18 years and are spending freely and propelling brisk economic growth. The U.S. economy is in its 10th year of expansion, the second-longest such period on record, and October marked the 100th straight month of hiring, a record streak.
The resulting strength in customer demand has led companies to steadily add workers. Though economists predict that hiring will eventually slow as the pool of unemployed Americans dwindles, there’s no sign of that happening yet.
Still, the latest month of healthy job growth might not tip many votes in the midterm elections. Polls have suggested that while Americans generally approve of the economy’s performance, that sentiment hasn’t necessarily broadened support for President Donald Trump or Republican congressional candidates.
In October, consumer confidence reached its highest point in 18 years, propelled by optimism about the job market. Last month’s plunge in stock prices didn’t dampen Americans’ enthusiasm, though the survey was conducted in the first half of October, before the full market decline had occurred.
In the July-September quarter, consumer spending grew by the most in four years and helped the economy expand at a 3.5 per cent annual rate. That growth followed a 4.2 per cent annual pace in the April-June quarter. Combined, the two quarters produced the strongest six-month stretch of growth in four years.
Manufacturing output and hiring remain healthy, according to a survey by a private trade association, although increased tariffs have raised factory costs.
By contrast, housing remains a weak spot in the economy, with sales of existing homes having fallen for six straight months as mortgage rates have risen to nearly 5 per cent. But slower sales have started to limit home price increases, which had been running at more than twice the pace of wage gains.
There are signs that pay growth is picking up. A measure of wage and salaries rose 3.1 per cent in the third quarter from a year earlier, the best such showing in a decade.
Although pay increases can help boost spending and propel the economy’s growth, they can also lead companies to raise prices to cover their higher labour costs. That trend, in turn, can accelerate inflation.
So far, though, inflation remains in check. The Federal Reserve’s preferred price measure rose 2 per cent in September compared with a year earlier, slightly lower than the year-over-year increase in August.
Christopher Rugaber, The Associated Press