Strong wage growth in November reaffirmed the durability of President Donald Trump’s economy and seemed to calm, at least momentarily, the turbulence in a stock market roiling from the administration’s trade policies.
The Labor Department on Friday reported 155,000 new jobs in November, down from 237,000 in October but still strong by historical standards. Unemployment remained near historic lows at 3.7 percent.
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But the real headline was November’s rapid wage growth. Average hourly earnings were up 3.1 percent over the previous year, matching October’s strong gain, which was the largest single-month rise since 2009. The November wage figure may signal that rising wages were not a momentary blip but a sustained trend as the labor market reaches full employment.
But the good news for workers risked creating more bad news on Wall Street. Signs of incipient inflation, combined with continued strong job growth, increase the likelihood that the Federal Reserve will raise interest rates later this month to curb inflation.
Early market signals, though, were positive, perhaps because job and wage growth were both smaller than predicted.
“President Trump’s policies continue to fuel strong and steady job growth,” Labor Secretary Alexander Acosta said in a statement. “Wage gains remain steady. Paychecks are growing.“
The report gives Trump some good news to balance against General Motors’ recent announcement that it will close five plants in key swing states. Predictions that Trump’s trade moves will dampen job growth have yet to prove true at the national level — though economists say that could change.
“CEOs and CFOs are all talking about how the tariffs are hurting them,” said Dan North, chief economist at Euler Hermes North America. “It hasn’t started flowing through with employment. We’re definitely seeing it flow through in profits, though.”
If the economy has indeed reached full employment, that has yet to have much effect on labor force participation rate, which at 62.9 percent in November remained close to its lowest level since the 1970s. That’s of little help to businesses struggling to fill a shortage of workers.
“With very tight labor markets, and record unfilled positions, businesses will have an increasingly tough time adding to payrolls,” Mark Zandi, the chief economist at Moody’s Analytics, said in a statement.