Connect With PPD
Sections: Economy

Americans’ Wages Are Rising, Labor Force Participation Highest Since 2013

Wages and salaries with keyboard graphic concept. (Photo: PPD/AdobeStock/Momius)

Following more than a decade of subpar-to-stagnant growth in the U.S. economy, American workers are finally starting to see a pay raise.

In the fourth-quarter (Q4) 2018, workers’ wages saw the largest gain since Q3 2008, and average hourly earnings have risen by 3% or greater for six consecutive months.

The 3.1% increase reported in the Labor Department (DOL) Employment Cost Index last week marked the first time in more than a decade that wages and salaries broke 3%.

The gain all but ensured moderate rate hikes would remain the path forward.

The Federal Reserve closely watches the Employment Cost Index, which also found compensation costs for civilian workers rose 2.9% for the 12-month period ending December 2018.

Compensation costs for private industry workers increased 3.0% over the year, an already solid compensation costs gain of 2.6% in December 2017.

The Bureau of Labor Statistics (BLS) on Friday released the monthly jobs report, less-commonly known as the Employment Situation. It showed strong wage growth and job creation, both of which largely unaffected by the partial government shutdown.

Secretary of Labor Alexander Acosta said the January 2019 Employment Situation report made them even more “confident the nation’s economy will continue to build on the strength seen in 2018 and the first report of 2019.”

“January’s Job Report demonstrated the strength of the American economy, with 304,000 jobs added as private sector job creation continued to surge despite the partial government shutdown,” Secretary Acosta said in a statement.

“Significant growth in the mining, construction, and transportation and warehousing sectors led the report.”

Construction employment added 52,000 new jobs in January, and 338,000 jobs over the past 12 months. Mining added 7,000 jobs for the month and has added 64,000 jobs over the year, a complete reversal from a negative trend under the previous administration.

While manufacturing added 13,000 new jobs, employment in the sector has expanded by an astonishing 261,000 over the year. Strong job creation in these sectors has now applied sustained upward pressure on wages.

“The labor market has continued its pattern of strong growth with little sign of a slowdown in sight,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “We saw significant growth in nearly all industries, with manufacturing adding the most jobs in more than four years.”

On Wednesday, the ADP National Employment Report found U.S. private sector employment rose by 213,000 jobs from December to January, including 35,000 in construction and 33,000 in manufacturing.

“Average hourly earnings rose by 3.2%, marking the sixth straight month in which year over year hourly earnings have been growing at or above 3%,” Secretary Acosta added. “Average weekly earnings rose at an even more robust 3.5%, year over year.”

For 2019, wages have gained by 85 cents, or 3.2%. 

The unemployment rate ticked up 0.1% to 4.0%, though it was in large part the result of roughly 175,000 furloughed federal workers seeking and obtaining employment in the private sector during the shutdown.

Still, the report in January marked the 11th consecutive month that the unemployment rate has been at or below 4.0%, and 100th straight month of positive job creation.

As a result of Americans entering the labor market, the participation rate rose to 63.2%, the highest for the gauge since August 2013.


SubscribeSign In
PPD Business Staff

PPD Business, the economy-reporting arm of People's Pundit Daily, is "making sense of current events." We are a no-holds barred, news reporting pundit of, by, and for the people.

Published by
PPD Business Staff

Recent Posts

ISM Manufacturing Index (PMI) Beats Forecast in June, Returns to Expansion

The Institute for Supply Management (ISM) Manufacturing Index (PMI) came in stronger than expected at…

15 hours ago

Private Sector Employment Gains 2,369,000 Jobs in June, Historic Rebound in May

The ADP National Employment Report finds private sector employment rose by 2,369,000 jobs in June…

15 hours ago

Consumer Confidence Bounces Back to Beat Forecast in June

The Conference Board Consumer Confidence Index (CCI) increased significantly by 12.2 points in June, easily…

2 days ago

S&P CoreLogic Case-Shiller Home Price Index (HPI) Gains Solidly for April

The S&P CoreLogic Case-Shiller 20-City Composite Home Price Index (HPI) rose as economists expected by…

2 days ago

Inside The Numbers: New Polling, Prognosticating and Fact-Checking

On Inside The Numbers, we discuss brand new polls, and provide analysis of the latest…

2 days ago

Texas Manufacturing Outlook Survey Rebounds Strongly in June

The Texas Manufacturing Outlook Survey rebounded strongly in June, far more than expected after posting…

3 days ago

This website uses cookies.