National Economic Council Director Kevin Hassett praises President Donald Trump’s ‘Kudlow’ speech.
The latest jobs report from the Department of Labor revealed that American workers salary benefits they continue to outpace stubborn inflation.
The Bureau of Labor Statistics released its statement activity report in February on Friday, which showed that average hourly earnings for workers rose faster than expected last month.
Nonfarm payroll workers saw their average hourly wages rise 15 cents, or 0.4%, monthly to $37.32 an hour. That beat the expected 0.3% increase forecast by LSEG economists.
Average earnings rose 3.8% in February compared to a year earlier, up from 3.7% in January. LSEG economists estimated that annual income growth would be unchanged at 3.7% in February.
US ECONOMY LOSES 92K JOBS IN FEBRUARY, BELOW EXPECTED
Wages rose 3.8% annually in February, beating economists’ expectations of a 3.7% rise. (Bill Pugliano/Getty Images)
BLS data also showed that the average work week was unchanged at 34.3 hours, in line with the LSEG economists’ estimate and unchanged since January. Among the workers in manufacturing sectorthe average work week decreased slightly by 0.1 hour to 40.1 hours, while overtime was unchanged at three hours.
Rising wages and stable work weeks come as stubborn inflation persisted above the Federal Reserve’s long-term goal of 2%. The Fed’s preferred inflation gauge, the personal expenditure index (PCE), rose to 2.9% annually in December. Core PCE, which excludes volatile food and energy prices, rose 3% from a year ago in December.
A separate inflation gauge, the consumer price index (CPI), rose just 2.4% year-on-year in January and fell after reading 2.7% in December. Core CPI increased 2.5% from a year ago in January.
Inflation goes back a long way financial pressures at homeespecially those on low incomes who are forced to pay more for essentials.
FED’S FAVORITE INFLATION GAUGE SHOWS CONSUMER PRICE GROWTH CONTINUED TO RISE IN DECEMBER
Wage benefits are rising faster than inflation helping to protect earners purchasing power by reducing the amount that is destroyed by price increases caused by inflation, although that flexibility is limited by inflation.
They can also indicate competition among employers for qualified workers. The unemployment rate was little changed in February, rising from 4.3% to 4.4% compared to the previous month.
“Jobs in the private sector, and the continued reduction of federal government workers, led to lower wage employment in February. But the unemployment rate remains low due to the closure of the southern borders. That is why wage growth remains healthy with an increase of 3.8%,” said Lawrence Yun, chief economist at the National Association of Realtors.
FED DISSENT GROWS AS OTHER OFFICIALS CHOOSE A RETURN TO INTEREST RATE CONTINUES Amid Stubborn Inflation
Pressure in the labor market has contributed to higher wage growth. (Joe Raedle/Getty Images)
Andy Bregezer, head of US regional banking and small business and head of commercial banking at TD, said it was “disappointing to see January’s hiring momentum reversed by February’s decline” and stressed that small businesses need to remain disciplined in this economic climate.
“What we continue to hear small business owners that while hiring pressure may ease slightly if job growth slows, wages and competition for skilled workers remain high. This is a situation where small business owners need to stay disciplined and balance growth plans with careful cost management.”
Gregory Daco, chief economist at EY-Parthenon, noted that wage growth was “stronger than expected” and said annual wage growth of 3.8% underscored that “labour cost pressures remain strong despite slowing job growth.”
GET FOX BUSINESS ON THE GO BY CLICKING HERE
He warned that “forward-looking indicators point to continued moderation in wage growth going forward, with the private unemployment rate remaining near the lowest level since early 2016 outside the recession, and business surveys continuing to show restraint in compensation plans.”
Daco said that given the expected low demand for workers, his company’s outlook sees wage growth rising to 3.5% in the second half of 2026.
