WASHINGTON >> Pay raises, the U.S. economy’s Achilles’ heel in its long recovery from the Great Recession, finally showed signs of accelerating last month — a trend that fanned inflation fears and sent bond yields rising and stocks sinking.
Wages grew in January from a year ago at the fastest pace in eight years, evidence that low unemployment is forcing some employers to pay more to keep or attract workers. The question is whether the gains will endure and spread throughout the economy.
U.S. employers added a robust 200,000 jobs in January, and the unemployment rate stayed at a low 4.1 percent for the fourth straight month, the Labor Department said Friday. But investors see wage growth as cause for concern because higher pay could help swell inflation and spur the Federal Reserve to quicken its pace of interest rate increases in coming months.
“Everyone has been rooting for wage growth, but be careful what you wish for,” said Josh Wright, chief economist at recruiting software company iCIMS.
Average hourly pay jumped 3.4 percent in the past year in transportation and warehousing, which has benefited from the explosive growth of e-commerce. That’s partly been driven by the online giant Amazon, which went on a hiring rampage last year, expanding its workforce by a breathtaking 66 percent — 225,000 jobs.