U.S. wage growth jumps to its highest rate since 2009

A man works on a 2012 Jeep Wrangler at the Chrysler Toledo Assembly complex in Toledo Ohio

The economy brushed past Hurricane Michael, adding 250,000 net new positions in October and handily overshooting forecasts, while salaries rose at the fastest pace in almost a decade, the Labor Department said.

Other data suggest hiring has indeed gathered pace, "but we won't know if that's really happening until we have another couple months' data", he said in a client note. The Federal Reserve's preferred price measure rose 2 percent in September compared with a year earlier, slightly lower than the year-over-year increase in August.

These long-term unemployed accounted for 22.5 percent of the total unemployed. And the proportion of Americans without a high school degree who are working has reached the highest point on records dating from 1992.

Manufacturing jobs jumped by 32,000, with the largest gains stemming from goods production. It is also occurring for relatively lower-skilled jobs such as warehouse workers and home-care aides.

Becky Frankiewicz, president of staffing firm ManpowerGroup North America, said companies are trying a variety of strategies to fill jobs.

"The moderate improvement in wage growth keeps the Fed on track to hike again in December, and enables them to transition to a slower pace of rate increases next year", economist Mickey Levy of Berenberg Capital Markets said before the report was released.

The resulting strength in customer demand has led companies to steadily add workers.

The strong jobs creation last month defied expectations, even by Trump's top economist, Kevin Hassett, who said he had been bracing for a dip in hiring after Hurricane Michael pummeled the Florida panhandle and Georgia. In addition, the figures reinforce the outlook for Federal Reserve interest-rate increases that will keep economic growth in check. But Fed policymakers expect growth to slide to 2.5 percent rate next year and to 2 percent in 2020.

Acosta also said noted that Hurricane Michael's path through the Florida Panhandle on October 10 had no discernible effect on employment data or responses to the monthly labor survey. Economists had projected the economy added around 200,000 jobs in October.

October also marked the second month in a row that a hurricane had landed in the middle of the survey - meaning the figures could be subject to extra volatility, Ian Shepherdson of Pantheon Macroeconomics said. Professional and business services, which include engineers, architects and accountants, gained 35,000 jobs. So far, hiring in the manufacturing sector does not appear to have been affected by the White House's protectionist trade policy, which has contributed to capacity constraints at factories. Construction employment grew by 30,000. Retail payrolls rose by only 2,400, likely restrained by layoffs related to Steinhoff's Mattress Firm bankruptcy as well as some store closures by Sears Holdings Corp. But in recent months, it appears they have finally taken the step economists have long recommended: Pay more.

Wage growth hit an annualized rate of 3.1% in October, the most since 2009.

Americans boosted their spending by the most in almost four years in the July-September quarter.

The labor force participation rate also ticked up in October to 62.9%, a 0.2% increase from September. That trend, in turn, can accelerate inflation.

Economists also noted that the pay increase remains well above the inflation rate.

Average hourly earnings for production and non-supervisory workers increased 3.2 per cent from a year earlier, following 2.8 per cent in September.

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