U.S. private sector payrolls increased by the most in eight months in October, suggesting overall job growth accelerated this month after Hurricane Florence weighed on restaurant and retail employment in September.

The strong jobs market is gradually putting upward pressure on compensation, with other data on Wednesday showing a solid increase in labor costs in the third quarter. Labor market strength is expected to underpin economic growth despite weak housing, slowing business investment and stock market turmoil.

The ADP national employment report showed private sector employment rose by 227k jobs last month, the biggest gain since February and beating market expectations for an increase of 189k. September's payrolls count was revised down to 218k from 230k.

The ADP report was published ahead of the release of the government's more comprehensive October employment report on Friday.

Acceleration in employment growth likely was tempered by Hurricane Michael, which struck Florida in mid-October.

The unemployment rate is forecast unchanged at a near 49-year low of 3.7% in October.

Separately on Wednesday, the Labor Department's Employment Cost Index report showed wages and salaries, which account for 70% of employment costs, jumped 0.9% in the third quarter after climbing 0.5% in the prior period.

That pushed the annual increase in wages and salaries to 2.9%, the biggest gain since September 2008, from 2.8% in the year to June. Wage growth was boosted by a surge in transportation and warehousing, likely reflecting a shortage of truck drivers. There were also gains in other industries, including information, healthcare and leisure and hospitality.

The jobs market is viewed as being close to or at full employment. There are a record 7.1 million job openings in the economy. Rising wages should help support consumer spending and soften the hit to the economy from a softening housing market and stalling business investment.

The surge in wages lifted the Employment Cost Index, the broadest measure of labor costs, which increased 0.8% in the third quarter after rising 0.6% in the second quarter. The ECI is widely viewed by policymakers as one of the better measures of labor market slack. It is also considered a better predictor of core inflation.

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