Workers’ Pay Rises at Fastest Rate in a Decade

Wages for private-sector workers accelerated in the third quarter, but benefit gains cooled.

Americans paychecks rose in the past year at the fastest rate in more than a decade, showing a tight labor market is paying dividends for more workers.

Wages and salaries paid to private-sector U.S. workers rose 3.1% from a year earlier in the third quarter, the Labor Department said Wednesday. That was strongest year-over-year gain since the second quarter of 2008.

The latest data adds to “broader evidence that wage growth has continued to trend gradually higher over recent quarters,” Michael Pearce, an economist at Capital Economics, wrote in a note to clients. With labor market conditions still tightening, “we expect wage growth will accelerate further from here.”

The unemployment rate fell to 3.7% in September, the end of the third quarter. That was the lowest jobless reading in 49 years. Combined with steady hiring, that appears to be putting workers in a position to command better compensation.

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