Labor Dept. figures show rising wages -- and possibly soon, inflation

U.S. workers get fastest wage increase in a decade — if you ignore inflation

According to a Reuters survey of economists, NFPs may have rebounded by 190,000 jobs in October after Florence depressed restaurant and retail payrolls in September.

Total compensation for civilian workers in the United States increased 2.8 percent over the last 12 months, the report said - up from 2.5 percent.

The employment cost index, which tracks the hiring cost for US employers quarterly, rose 0.8 percent during the third quarter, beating the estimated 0.7 percent that economists surveyed by Refinitiv ahead of Wednesday's release predicted.

To combat increased employment costs, employers have been looking to non-salary measures like insurance and benefits packages to retain workers, but may have to start increasing wages to attract and retain talent going forward.

Wednesday's report showed private-sector wages and salaries rose 3.1 percent in the third quarter from a year earlier, the best pace since 2008.

USA job growth rebounded sharply in October and wages recorded their largest annual gain in 9-1/2 years, pointing to further labor market tightening that could encourage the Federal Reserve to raise interest rates again in December.

Real income has been lagging behind economic growth for years. There were a record 7.1 million job openings in the economy in August, compared with only some 6.2 million unemployed. The annual increase is expected to surpass 3 percent in October's figures, which would be the first gain at that pace since 2009. The rate was actually 7.5 percent in September, when counting people who sought a job in the past year and also those with part-time jobs in want of a full-time one. They were up 2.6 percent in the 12 months through September after rising 2.9 percent in the year to June.

"Wages are grinding higher as the labor market continues to tighten", said Justin Weidner, an economist at Deutsche Bank.

Sustained labor market strength eased fears about the economy's health following weak housing and business spending data.

Economists say his policies deserve some credit for triggering faster growth, but unemployment has been falling steadily for eight years and wages have been inching higher. The personal consumption expenditures price index excluding the volatile food and energy components has increased 2.0 percent for five straight months. The unemployment rate is forecast unchanged at a near 49-year low of 3.7% in October. The Standard & Poor's 500 index .SPX dropped 6.9 percent in October, the biggest decline in seven years.

Manufacturing expanded by 17,000 jobs and construction gained just as many. The services sector did the most hiring, with the biggest expansion coming in trade, transportation, and utility companies.

Fed Chairman Jerome Powell is expected to approve another rate hike in December.

Information for this article was contributed by Heather Long of The Washington Post; by Christopher Rugaber of The Associated Press; and by Shobhana Chandra of Bloomberg News.

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