Prices for U.S. Treasuries fell sharply and US stock index futures edged lower after the data. Economists had expected an increase of 190,000 with an unemployment rate at 5.0%.
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Veterans of the most recent Gulf War era, defined as those who have served sometime since September 2001, have made employment strides over the past year.
“The overriding message from today’s employment report is the soft patch is over and the rate hike is on”, said Chris Low, chief economist at FTN Financial. That was the biggest increase since July 2009 and could give Fed officials confidence that inflation will gradually move towards their 2 percent target.
Strong hiring should continue to reduce the unemployment rate over time.
Employers added a robust 271,000 jobs last month.
The jobless rate for those with disabilities hit 10.5 percent in October.
“It was pretty much everything you could ask for in a jobs report”, said Michelle Meyer, deputy head of USA economics at Bank of America Merrill Lynch.
August numbers were revised upward from 136,000 to 153,000, though September was revised downward from 142,000 to 137,000.
Business, health care, retail, food and drink, and the construction industries all saw job gains.
“The case for tightening in December – and a lot more in 2016 – looks increasingly strong”, said Jim O’Sullivan, chief U.S. economist at High Frequency Economics.
Mining employment has declined by 109,000 since peaking in December 2014.
The U-6 rate is a preferred measure of unemployment by Fed chair Janet Yellen as she assesses the strength of the USA labor market. They concluded the probability of a rate hike in December remains higher due to this exceptionally positive report as the CMEGroup’s Fedwatch tool shows the implied probability of a December rate hike at 70 percent. The high number of vacant positions also explains why so many economists were skeptical the labor market had taken a turn for the worse.
Friday’s report will certainly boost the Fed’s confidence that the job market is continuing to progress – a precondition for the central bank to start lifting its benchmark short-term interest rate, which has been held near zero since late 2008.
Chicago Fed President Charles Evans, a voting member of the Federal Open Market Committee, the U.S. Federal Reserve’s policy-making arm, said Friday that the report was “very good news” and that strong jobs growth would help push up inflation. “Going into the last Fed meeting that number was 33 percent”. “With 14 and a half months to go in this administration – 441 days until “the weekend” – we want to work with Democrats and Republicans in Congress to complete the unfinished business of this recovery, to create shared prosperity and build an economy that works for everyone”.
PIPE LEAK: TransCanada fell $2.06, or 6 percent, to $32.30 after The Associated Press and other news outlets reported that the White House, after years of scrutiny, planned to reject the company’s proposed 1,200-mile Keystone XL oil pipeline. The October increase of 31,000 followed little employment gain in several preceding months.
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After a prolonged period of relatively stagnant pay for many Americans, hourly wages climbed a solid 9 cents in October to $25.20.
