Independent data released this week points to slightly higher wages for workers and a still-tight labor market for employers. And it all points to more confident consumers.
In its monthly National Employment Report, ADP said the economy produced 227,000 private sector jobs between September and October. The services sector did the most hiring, with the biggest expansion coming in trade, transportation, and utility companies.
"The job market bounced back strongly last month despite being hit by back-to-back hurricanes," said Mark Zandi, chief economist at Moody's Analytics. "Testimonial to the robust employment picture is the broad-based gains in jobs across industries. The only blemish is the struggles small businesses are having filling open job positions."
Pay is increasing
That may be one reason employers who can find qualified candidates have to pay them more. The Paychex IHS Markit Small Business Employment Watch report for October again reflects a tight labor market, a slight dip in hiring, and an uptick in wages.
Hiring was down a modest 0.06 percent from last month. At the same time, the rate of hourly earnings growth in October was at 2.41 percent, rising for the second straight month. Analysts link the dip in hiring to a lack of available candidates to fill them.
"According to the latest Paychex Business Sentiment Report, business owners rank their ability to fill open positions with qualified candidates as a top challenge," said Martin Mucci, Paychex president and CEO. "With employment growth continuing to show moderate declines, we're seeing first-hand the impact of the tightening labor market on small businesses."
That's not so good for businesses that need more help, but it’s very good for consumers. The report shows consumers who live in the South enjoyed the strongest job growth, while those in the West saw their paychecks grow the most.
More confident consumers
Nationwide, consumer confidence rose in October, even as the stock market turned in its worst month of 2018. The Conference Board said its Consumer Confidence Index reached 137.9 this month, up from 135.3 in September.
The Present Situation Index – based on consumers' assessment of current business and labor market conditions – turned in an even bigger gain, rising from 169.4 to 172.8.
The Expectations Index – based on consumers' short-term outlook for income, business, and labor market conditions – increased from 112.5 last month to 114.6 this month.
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