In this Jan. 29, 2015 file photo, Tyler Kelly, 19, left, fills out applications for parking enforcement and environmental compliance jobs during a public safety job fair at City Hall in Saginaw, Mich. (AP Photo/The Saginaw News, David C. Bristow)

(Bloomberg) – The American job market shows signs of entering a new stage that will bolster households as employers fight to retain and attract workers by paying them more.

Wages for private-sector employees climbed 0.7 percent in the first quarter and were up 2.8 percent in the 12 months through March, the biggest gain in more than six years, the Labor Department reported Thursday. The agency also said the number of claims for jobless benefits declined last week to the lowest level since 2000.

Six years after the recession ended, unemployment may now be low enough to start prompting companies to compete against each other for staff. Bigger paychecks, a missing piece of the expansion, would make it more likely that the slowdown in economic growth last quarter will be fleeting, bearing out Federal Reserve policy makers’ assessment.

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“You can feel somewhat more constructive on consumer spending in the next quarter or so given that wages have picked up and given that claims are so low,” said Michelle Meyer, deputy head of U.S. economics at Bank of America Corp. in New York. “There’s still further ammunition for consumers to spend.”

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