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 becomes tighter in an expansion that appears to have gained steam in 2018.
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 wage increase was the largest since mid-2009.
Wage growth has been a missing ingredient in the expansion. It hovered for years below pre-recession 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.
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