United States job growth surged in October and the unemployment rate hit a 7-1/2-year low of 5.0% in a show of economic strength that makes it much more likely the Federal Reserve will raise interest rates in December.
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The surprisingly strong gains, which came after two straight months of lackluster growth, helped push the unemployment rate down a notch, to 5% from 5.1% in September, the Labor Department said Friday. Average hourly earnings gained 0.4 percent from September, the most in more than six years, after a 2.3 percent rise the month before.
“At this level, the unemployment rate is close to what would normally be considered the threshold for full employment by the Fed and many private economists”, writes Nelson D. Schwartz at The New York Times.
USA financial market indexes edged higher Friday after an October jobs report that significantly beat economists’ expectations.
With the announcement earlier this week by Federal Reserve Chairman Janet Yellen before Congress that a short-term rate hike was likely in December if the October and November jobs reports were strong. Almost 4.4 million people who weren’t in the labor force in September had jobs in October, and another 2.2 million people entered the labor force to start looking for work.
A broad measure of joblessness that includes people who want to work but have given up searching and those working part-time because they can not find full-time employment fell two-tenths of a point to 9.8 per cent, the lowest level since May 2008.
Analysts had previously estimated that 190,000 new jobs would be created last month. The unemployment rate fell slightly to 5 percent, according to the report from the agency’s Bureau of Labor Statistics. Healthy consumer spending is supporting strong job gains even as factory payrolls were flat and oil and gas drillers cut jobs. The only industry that showed a serious decline was mining, which shed 5,000 jobs in October.
The rise in pay took the wage inflation rate to 2.5% year on year, the best annual wages boost since 2009, when it was falling in the aftermath of the financial crisis.
The robust hiring in October was paced by gains in professional and business services, health care, retail trade, food services and construction, the Labor Department said.
Last month, there were 24,928,000 foreign-born workers employed, which means that the number has increased by 192,000 since then.
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Lawmakers and administration officials have made finding careers for veterans a priority in recent years, but critics have noted that those efforts are limited by larger struggles in the national job market.
