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Brisk spending has buttressed jobs and wage growth. Photo: Stephen Maturen / Getty

The U.S. is headed for a jobless rate of 3.5% this time next year, according to Mark Zandi, chief economist at Moody's Analytics, a level reached in only two other periods since the government began keeping such records in 1948.

Why it matters: The job market is becoming so tight that employers are being forced to cough up wage increases, the long lack of which has been a factor in U.S. political disaffection.

In a call with reporters today, Zandi described a "rip-roaring job market" that includes accelerating increases in wages. His jobless projection is just outside the lower range of the Federal Reserve's full-year 2019 forecast of 3.6%-4.0%. Zandi was commenting on ADP’s monthly National Employment Report, which precedes Friday's Bureau of Labor Statistics jobs report for December.

  • In a report today, the U.S. Bureau of Labor Statistics said that wages and benefits rose 2.6% in 2017, matching the highest rate since 2008, writes the WSJ's Sarah Chaney. That is up from 2.2% in 2016. Again, it's a sign that workers are benefitting alongside companies and Wall Street from broad economic growth.
  • "That's what we'd expect to see as the labor market keeps tightening," Jed Kolko, chief economist at Indeed, tells Axios. "Firms need to raise wages, adjust hiring requirements, or invest more in training in order to get the workers they need.

Harry Holzer, a professor at Georgetown University and former chief economist at the Labor Department, tells Axios that one thing that could interfere with the optimistic forecasts is the Fed, which could accelerate interest rate hikes to forestall inflation.

Go deeper: In a recent paper, researchers Jose Azar, Ioana Marinescu and Marshall Steinbaum found that wages have been held down in rural U.S. areas by a mergers that concentrate industries in a few hands.

Go deeper

The rebellion against Silicon Valley (the place)

Photo illustration: Sarah Grillo/Axios. Smith Collection/Gado via Getty Images

Silicon Valley may be a "state of mind," but it's also very much a real enclave in Northern California. Now, a growing faction of the tech industry is boycotting it.

Why it matters: The Bay Area is facing for the first time the prospect of losing its crown as the top destination for tech workers and startups — which could have an economic impact on the region and force it to reckon with its local issues.

Erica Pandey, author of @Work
1 hour ago - Economy & Business

Telework's tax mess

Illustration: Annelise Capossela/Axios

As teleworkers flit from city to city, they're creating a huge tax mess.

Why it matters: Our tax laws aren't built for telecommuting, and this new way of working could have dire implications for city and state budgets.

Wanted: New media bosses, everywhere

Illustration: Sarah Grillo/Axios

The Washington Post, Los Angeles Times, Reuters, HuffPost and Wired are all looking for new editors. Soon, The New York Times will be too.

Why it matters: The new hires will reflect a new generation — one that's addicted to technology, demands accountability and expects diversity to be a priority.