Washington
The economy added a strong 201,000 jobs, and the unemployment rate stayed at 3.9 percent, near an 18-year low, the government said on Friday in its monthly jobs report.
Taken as a whole, the data pointed to a job market that remains resilient even after nearly a decade of economic growth — the second-longest such stretch in U.S. history — and even with tariffs and counter-tariffs on imports and exports looming over U.S. employers that rely on global trade.
The economy is expanding at a healthy pace, fueled by tax cuts, confident consumers, greater business investment in equipment and more government spending.
Growth reached 4.2 percent at an annual rate in the April-June quarter, the fastest pace in four years.
“I view this as the strongest job market in a generation,” said Andrew Chamberlain, chief economist at career website Glassdoor.
Even while reporting a robust job gain for August, the Labor Department revised sharply down its estimate of hiring in June and July. The government now says employers added 50,000 fewer jobs in those two months combined than it previously had estimated.
But the 201,000 job gain in August was nearly equal to the average gain of 196,000 over the prior 12 months, evidence of how consistent job growth remains.
Average hourly pay jumped 0.4 percent in August and increased 2.9 percent compared with a year earlier. That’s the fastest annual gain since June 2009, when the Great Recession ended. Still, rising inflation, which also reached 2.9 percent in July from a year earlier, has offset that gain.
Yet most economists said they saw the pay increase as an encouraging sign that the low unemployment rate is compelling more employers to raise pay in order to compete successfully for workers.
“It looks like we’re finally seeing that acceleration in wage growth that we’ve been waiting for,” said Gus Faucher, chief economist at PNC Financial Services. “It’s good news for workers’ paychecks, it’s good news for consumers and it’s good news for the overall economy.”
The rising wage and jobs data make it a near-certainty that the Federal Reserve will raise short-term interest rates when it meets later this month, economists said.
Most Fed watchers also expect another rate hike in December and perhaps two more next year.
The prospect of higher borrowing costs — as well as bigger paychecks, which can cut into corporate profits — appeared to hold back the stock market on Friday.
The Dow Jones industrial average fell 104 points in mid-day trading.
Jason Mazzarone, chief executive of SoBol, a restaurant chain that sells a variety of acai bowls, says he is paying workers more, mostly because of higher minimum wage laws in New York and other states where his 26-store chain operates. He also has raised pay for other workers who already were earning more than the minimum.
On New York’s Long Island, for example, where many of his outlets are located, the minimum wage will reach $12 an hour by year’s end. For shift managers now making $16 an hour, Mazzarone said, “their pay has to go up, too.”