The USA economy added 271,000 jobs in October, the Labor Department said Friday, surpassing analysts’ expectations of 185,000 jobs.
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Mark Vitner, the senior economist at Wells Fargo Bank, one of the largest in the USA, told VOA that Friday’s report was “pretty favorable”, and that “It should put to rest the doubts that had cropped up in the last couple months”.
“Another blowout month as good as October is also a long shot, so the Federal Reserve will look at smoother averages rather than individual months, and will also have the November report before their next meeting”, he wrote in a statement.
Investors have raised to about 70 percent the probability of a rate increase by policy makers’ December meeting, according to pricing in the federal funds futures market.
But stocks have rebounded recently and many economists expect solid domestic demand to fuel an improving labor market in the final months of the year.
A Reuters poll of top bond dealers showed a growing number expected borrowing costs to go up next month, with 15 of 17 looking for a hike.
The unemployment rate fell 0.01% to the lowest level since April 2008. At the same time, USA manufacturing has slowed and economies overseas are struggling, with worries about a weakening Chinese economy, the world’s second biggest.
Fear over a “hard landing” in China have decreased, Bullard said, with growth in the country still estimated at close to 7 percent and indexes of financial market stress now back to pre-market levels, Bullard said in a presentation to St. Louis-area financial advisers.
October’s employment growth was enough to lower the unemployment to 5 percent, after it was stuck at 5.1 percent since August. Testifying before a committee of the U.S. Congress on Wednesday, Fed Chair Janet Yellen described the USA economy as “performing well” and said an interest rate hike in December was a “live possibility”. The low percentage of quits among the unemployed indicates workers do not feel comfortable leaving a job without a new job lined up. Yes, soon the Fed will be inching rates up higher, so you may well pay more for your variable-rate debts such as credit cards, adjustable-rate mortgages and home equity lines of credit.
The state of the labor market, which represents half of the Fed’s dual mandate to promote employment and keep prices stable, has been hard to pin down. Over the past year, hourly earnings have increased 2.5 percent.
Many higher-paying sectors also enjoyed healthy gains, including professional and business services, which includes lawyers, architects and engineers. The rise in health care employment is in line with the 41,000 average for the past year.
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The benchmark 10-year U.S. Treasury note rose to a yield of 2.32 percent from 2.23 percent on Thursday, a big move for that security. Last month, Rider University in New Jersey, said there will be faculty layoffs, following layoffs announced earlier this year at Drexel and La Salle Universities.
