Accelerated growth in jobs and wages in October gave President Donald Trump a critical boost in the final days before the midterm elections.
The Labor Department on Friday reported 250,000 new jobs in October, up from 118,000in September. Wage growth rose sharply, with average hourly earnings up 3.1 percent over the previous year, up from 2.8 percent in September.Unemployment remained at historic lows at 3.7 percent.
The positive report gives Trump an opportunity to argue that the economy, under his leadership, is exceeding expectations. The rapid increase in wages — the largest year-over-year gain since 2009 — could also undermine Democrats’ argument that economic gains under Trump have left behind working-class voters.
On Wednesday, the president argued the economy would backslide without Republicans in charge.
“If [the election] comes out good, I think the market is going to continue to go through a period like we’ve never seen before,” Trump said at a White House workforce event. “We are literally the hottest country in the world economically,” Trump added, “and it’s a great thing to see.”
Brisk economic growth under Trump — an obvious talking point for any president — has not been Trump’s principal theme in the runup to the election. Instead, Trump has focused on a caravan of Central American migrants heading north to the U.S. border; on a constitutionally dubious threat to revoke birthright citizenship; on fomenting trade wars with Canada, Mexico, and China; and on a long-running battle with the Federal Reserve over raising interest rates.
Evidence that wages are rising increases the likelihood that the Federal Reserve will raise rates next month to keep inflation in check. That, in turn, would likely depress the stock market — already turbulent in recent weeks — and prompt more fury from the president.
Meanwhile, businesses are still struggling to find enough workers to fill open jobs, economists say.
“Even if businesses want to hire workers, they’re not going to be able to find them,” said Mark Zandi, the chief economist for Moody’s Analytics. “At some point it’s going to bite into the job numbers — it’s inevitable.”
The labor force participation rate — the share of people actually looking for a job — edged up slightly but remained close to 63 percent in October, near its lowest level since the 1970s.
“We have a ways to go simply because there are a lot of workers on the sidelines,” said Dan North, chief economist at Euler Hermes North America.
Analysts surveyed by Bloomberg had predicted the creation of 190,000 jobs, an increase in over-the-year hourly earnings of 3 percent and an unemployment rate of 3.7 percent.