Hiring was particularly strong for white collar employers.
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USA employers added 271,000 jobs in October, the largest gain this year and a sign of economic growth that may position the Federal Reserve to raise interest rates next month. At the same time, US manufacturing has slowed and economies overseas are struggling, with worries about a weakening Chinese economy, the world’s second biggest.
The industries that showed the most gains were “professional and business services, healthcare, retail trade, food services and drinking places, and construction”, according to the report. Healthy consumer spending is supporting strong job gains even as factory payrolls were flat and oil and gas drillers cut jobs.
Minutes from the Fed’s October 27-28 meeting and subsequent comments from Yellen have firmly put a rate hike on the table at the central bank’s upcoming December 15-16 gathering. The latest jobless figure is the lowest since April 2008 and exactly half the rate at its peak during the Great Recession in October 2009.
Traders see a 70 percent chance the Fed will boost interest rates from near zero at its December meeting, up from 56 percent odds before the release of the labor data Friday. We won’t know for sure for several months, but the most likely explanation for Friday’s numbers is that the USA job market is still where economists thought it was back before the August slowdown: in a state of steady, solid job growth.
Robust hiring also pushed up wages 9 cents to $25.20. Wages have increased 2.5 percent from one year ago.
“On balance, the labor market is the strongest it has been in many years, but a few weakness remains”, Kiefer said.
The Fed appears to be keeping its options open: this week it emphasised that no decision had been made over a possible first rise in interest rates for a decade.
Economists had forecast nonfarm payrolls increasing 180,000 last month and the unemployment rate remaining at 5.1 percent. The economy typically needs only about 100,000 jobs a month to keep unemployment from rising. A measure of service-sector activity and employment, along with online job ads, rose last month. Fed Chair Janet L. 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 as well as the labor market.
On Friday, too, the U.S. employment rate improved to 5 per cent, marginally above the Federal Reserves’ stated goal of full employment at 4.9 per cent and down from 5.1 per cent last time. Silver dropped 1.3 percent to $14.76 an ounce and platinum was down 0.7 percent at $936.60 an ounce.
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Economists expect growth to rebound to 2.5 percent or more in the final three months of the year.
