Wages gain, Payrolls rise, as Expansion rolls ahead

U.S. nonfarm payrolls expanded by 201,000, while private-sector hourly wages grew 2.9% from a year earlier.

A robust economy drove U.S. wages higher in August, new evidence that workers are gaining bargaining power with their employers as the nation’s pool of available labor tightens.

The Labor Department reported Friday that worker payrolls expanded by 201,000 in August and private-sector hourly wages grew 2.9% from a year earlier. The payroll gain marked the record 95th consecutive month of job growth—much of it near or slightly below that 200,000 monthly mark—and the year-over-year wage increase was the largest since mid-2009.

The unemployment rate was 3.9% in August for the second month in a row.

Wage growth has been a missing ingredient in the expansion. It hovered for years below prerecession levels but has been creeping higher since 2015, with the August reading marking a new high for the expansion.

Many factors held wage growth down, including slack in the economy after the 2007-09 recession and increased competition in the U.S. from workers abroad. But as U.S. unemployment has declined, the supply of workers has diminished, giving individuals more leverage to demand and get better pay.

“Everybody is battling for the very few skilled people out there,” like machinists and engineers, said Richard Huether, chief executive of Independent Can Co., based in Belcamp, Md. He said he had seen some employees resign without backup jobs, for instance to move back home, knowing they’ll find something where they want it.

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