U.S. Economy Surprises with Job Additions and Wage Inflation

​For August, the U.S. posted surprising job figures, adding more jobs than expected and finding the wage inflation that has been missing for so long. Further, the unemployment rate maintained at consistent levels. Lastly, the ISM Purchasing Manager’s Index was released for August, registering at its highest level in 14 years.

• The ISM Purchasing Manager’s Index (PMI) reached a record high in August. Up from 58.1 in July, the index registered a reading of 61.3 for the month of August, its highest since 2004. This is the twenty-fourth straight month the index has come in above the neutral level of 50.0, indicating two straight years of monthly manufacturing growth.

• In August, the U.S. economy beat expectations by adding 201,000 jobs, 10,000 more than economists surveyed by Reuters were expecting. After job growth fell 29.3% in July, job growth has returned to levels seen throughout much of 2018. Furthermore, the unemployment rate stood still at 3.9%, staying within the same range experienced since April of this year.

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• Also, in August, U.S. worker’s wages grew at an annualized 2.9% rate, breaking through to wage growth levels not seen since before the Great Recession. Higher wage growth has been anticipated for a number of months as the labor market has tightened. With limited supply for workers and higher demand for employees, wages are finally being bid higher.