MARCH
Average hourly wages rose 8 cents to $26.82 an hour, lifting the annual gain to 2.7%, in line with expectations.
That is on top of 2.9% in January -the largest yearly wage growth since 2009 < my comment
Wall Street economists expected a 175,000 job gain, 4.0% unemployment and 2.7% average wage growth.
Still, job growth has averaged a solid 202,000 the past three months, including revisions. A balmy February likely shifted some seasonal job employment forward, depressing March job creation.
Harm Bandholz, chief U.S. economist at UniCredit, pointed out that jobless rate actually did decline in March — if you don't round to the tenths — from 4.14% to 4.07%. Over the past 12 months, the labor force has increased by 125,000 per month, on average, well below the pace of job creation. "Looking forward, we continue to expect the jobless rate to fall towards 3.5% by the end of the year."
Employers also have been increasing work hours, further evidence of less slack. On a weekly basis, the average wage rose 3.3% from a year ago in March, the best gain in seven years.
Investors should expect the improvement in hourly wage growth to be the start of a trend for two reasons.
First, dozens of major employers announced wage hikes over the past few months, but few came early enough to show up in February's jobs report. Walmart (WMT) and CVS Health (CVS) hiked their minimum wages to $11 an hour. Six months after raising its minimum wage to $11, Target (TGT) said last month that it will pay all current associates at least $12 an hour starting this spring.
Second, wage growth receded in the spring of 2017, rising just 2.2% at an annual rate from March through June. As those months that saw depressed pay gains drop off, replaced by months with firmer growth this year, the annual rate will trend higher.
Walmart Wage Growth Contagious
Take a closer look at Walmart's wage changes. Before its pay hike announced in January 2018, Walmart hadn't raised its base wage in nearly three years. That's a big deal. When Walmart hiked its minimum wage for all current associates to $10 an hour in February 2016, that wage hike was contagious.
Walmart is big enough to put upward pressure on wages for other employers. Target and Costco (COST) were among those who quickly hiked pay shortly after that 2016 move. Average hourly earnings growth rose to 2.8%
that July before momentum flagged.
Walmart's 2016 wage hike came when the jobless rate was nearly 5%. Now it's around 4%, so competition for workers has intensified. At least for workers on the lower end of the wage spectrum, pay hikes appear to be broad-based. Starbucks (SBUX), Kroger (KR), Dollar Tree (DLTR) and Ross Stores (ROST) all have said they're raising pay. Meanwhile, dozens of banks, including Bank of America (BAC) and Wells Fargo (WFC) hiked their minimum wage to $15 an hour for tellers.
https://www.investors.com/news/econo...-unemployment/
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