“After two months of subpar growth, hiring accelerated in October and wage and salary jobs experienced the largest monthly gain of the year”, he said.
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The probability was 58% ahead of the jobs report.
The spike in employment bolsters the chance for a US rate hike in December that could add to the dollar’s strength, making commodities denominated in the greenback less affordable to holders of other currencies.
Wall Street has been in a months-long guessing game about the Federal Reserve, trying to figure out when the policymakers at the nation’s central bank will finally raise interest rates.
Zero: The number of new jobs in manufacturing last month.
The bond market’s reaction to the jobs number was far more volatile than the stock market’s, with bond prices sinking as investors scaled back their holdings of Treasuries and safer investments.
NEW YORK (AP) – Stocks were lower in early trading Friday following a surprisingly strong October jobs report that sets the stage for a potential interest rate hike next month.
The civilian labor force participation rate was unchanged at 62.4 percent in October, following a decline of 0.2 percentage point in September.
“What is happening today is that investors for the first time in months are thinking that there is a risk that the complacency on the Fed rates path needs to be re-examined”, Citigroup strategist Steven Englander wrote to clients.
Fed Chair Janet Yellen said Wednesday that the economy is “performing well” and that a rate hike could come next month, but policymakers are closely monitoring conditions affecting the outlook for inflation and the labor market.
In contrast, bank stocks rose sharply as investors bet that higher interest rates would translate into higher profits, since they may be able to charge more for lending.
In a weekly basis, all three major indices extended their gains into a sixth straight week, with the Dow, the S&P 500 and the Nasdaq up 1.4 percent, 1.0 percent and 1.8 percent, respectively. Consumers, the biggest driver of the US economy, are still spending at a healthy clip, supported by lower gas prices and a recovery in the stock market.
The unemployment rate and number of unemployed persons were virtually unchanged from September to October at 5.0 percent and 7.9 million, respectively, but are down by 0.7 percentage points and 1.1 million.
The average 30-year conforming rate was 3.99 percent yesterday, having increased 9 basis points in one week due to the consensus view of a strong, but not this strong, employment report.
Odds on a December interest-rate increase, measured by pricing in the fed funds futures market, rose to 70% from 56% on Thursday.
Retailers added almost 44,000 jobs in October, the most since last November, a sign that they are preparing for strong sales over the winter holidays.
The yield on the two-year note, highly sensitive to changes in the Fed’s interest-rate policy outlook, was 0.889%, the highest closing level since May 2010. It was down 1.3 per cent at US$1,089.21 by 2:12 pm EST (1912 GMT). Against the pound, it strengthened by more than a cent to $1.5047.
Silver for December delivery fell 29.2 cents, or 1.95 percent, to close at 14.691 dollars per ounce.
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Spot gold, stronger initially, fell as much as 1.7 percent to $1,084.90 an ounce, its lowest since August 7. In addition, the employment-to-population ratio edged lower, to 59.2 percent. Republication or redistribution of content provided by EconoTimes is expressly prohibited without the prior written consent of EconoTimes, except for personal and non-commercial use.
