In a jobs report that may influence the Federal Reserve’s decision on interest rates, the Labor Department says that 271,000 jobs were added in October.
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Just three sectors accounted for a majority of job gains last month. “Gold is now down eight days in a row but will remain under pressure as the market’s view of the chances of December rate hike soars”.
“The recent 3-month trend of 187,000 will continue to pressure the unemployment rate lower, reducing slack in the labor market”. The unemployment rate fell slightly to 5 percent, from 5.1 percent.
Construction payrolls, however, increased 31,000 last month, the biggest gain since February. – David Rosenberg, chief strategist, Gluskin Sheff & Associates Inc.
“And whilst this does not guarantee a December rate hike from the Fed – there is one more labour report before the 16 December meeting – at this stage, we feel that we would need to see a catastrophically bad November report for the Fed to sit on its hands again in December”. “In other words, it is déjà vu all over again”.
A few economists think that it might the be the start of a series of rate rises.
124-c-25-(Jerry Bodlander, AP correspondent)-“meet next month”-AP correspondent Jerry Bodlander reports the October jobs report was very strong”. Worker pay increased 2.5 percent over the 12 months ended in October, the most in more than six years, following a 2.3 percent gain the prior month. “Barring catastrophe, everything looks set for the Fed to raise rates in December”.
Meanwhile, the labor force participation rate held steady last month at 62.4 percent, the lowest it’s been since the late 1970’s. The calculation assumes the effective fed funds rate averages 0.375 percent after the first increase. The Canadian dollar hit its weakest level against the US dollar since October 1 on Friday after stronger than expected U.S.jobs data eclipsed an election-enhanced jump in Canadian jobs, with soft oil prices and the Keystone pipeline rejection also weighing on the currency.
The unexpectedly strong U.S.jobs report on Friday raised the already strong likelihood that the central bank will raise rates in December, ending a seven-year run of near-zero policy.
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.
On a nationwide level, transportation and warehousing jobs increased by 2.3 percent over the year while jobs in wholesale trade grew by 1.3 percent in October.
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A rate increase diminishes the appeal of precious metals, which don’t offer interest. The latter gauge rose today to 1.26%, up from 1% on september 28, though still lower than its 1.44% average this year and the Fed’s 2% inflation target. Over the past 12 months, the unemployment rate and the number of unemployed persons were down by 0.7 percentage point and 1.1 million, respectively.
