US workers see highest wage growth since 2008

Pay for U.S. workers increased 0.9 percent from July to September, bumping yearly earnings growth to the highest level since the 2008 recession.

Wages and salaries for American workers in the private sector rose 0.8 percent over the past three months, while state and local government workers saw 0.9 percent more pay since July, according to data released Wednesday by the Bureau of Labor Statistics.

{mosads}The uptick exceeded expectations from analysts and outpaced the 0.5-percent gain in pay between April and June of 2018. Wages and salaries have increased 2.9 percent on the year since September 2017, the fastest rate since September 2008.

Total compensation costs for U.S. businesses rose 0.8 percent between July and September, with nonpay benefits rising 0.4 percent. Wages and salaries make up roughly 70 percent of compensation costs for U.S. firms, while nonpay benefits take the other 30 percent.

Wage growth slowed substantially after the great recession and has lagged behind the massive growth in U.S. jobs and equity markets throughout the recovery. With unemployment at 3.7 percent, the uptick in wage growth suggests that businesses are ramping up efforts to expand their payrolls with greater compensation.

The ADP national employment report, also released Wednesday, showed private businesses adding 227,000 jobs in October, beating economists’ expectations for an increase of 189,000. The Labor Department will release its jobs report on Friday.

The U.S. economy appears to be in solid shape heading into 2019, boasting unemployment near record lows and a strong 3.5-percent growth rate in the third quarter.

Even so, the lagging stock market, declining global growth, lagging business investment and trade wars between major economies have raised concerns about an impending slowdown.