USA employers add 271000 jobs as unemployment dips to 5%

“Increases in the minimum wage and a surge in hiring of low-wage workers was a primary reason for improvements in consumer sentiment in October”.

Indeed, US central bankers have been saying job creation needs to slow. There has not been an increase in the Fed’t interest rate since June 2006, before the beginning of the American financial crisis. The strong dollar and faltering growth in China, Europe and Japan have cut into exports of factory goods.

Wall St dips as jobs data boosts odds of Dec rate hike; oil slumps.

Still, the US economy has advanced.

Traders saw a 72 percent probability that the Fed would raise its benchmark rate next month, according to futures data compiled by Bloomberg, up from 56 percent before the jobs report’s release.

It should be noted that the strong U.S. dollar may have had a strong impact on the manufacturing industry. Adding to this certainty is the minutes from the Federal Reserve’s October meeting, which include a rate hike agenda in the bank’s December policy meeting.

Considered a less likely possibility as recently as this summer, a December rate hike is looking far more certain.

“The employment report had everything you could have asked for”, Michelle Meyer, deputy US chief economist at Bank of America Merrill Lynch in New York, told Reuters.

Friday’s announcement tops economists’ consensus expectations, which had forecast a modest gain of about 180,000 jobs.

The unemployment rate, the lowest since April 2008, is at 5.0%. Evans, a voter on Fed policy this year under its rotating system, has long advocated for an initial rate hike in 2016 but softened his stance in October when he said adhering to a gradual rate path was more important than the timing of liftoff.

American manufacturing has taken a hit with softening sales in overseas markets, a stronger dollar and oil-sector weakness depressing demand.

After gaining an average of 260,000 jobs a month in 2014, the economy has only added around 200,000 a month this year. Among the unemployed, 26.8 percent are out of work for more than six months, up from 26.6 percent last month. To the downside, immediate support level is located at 1.3280 levels.

Average hourly earnings rose by 0.4 percent from the prior month.

Following the report, the two-year yield – which has been closely watched by investors – rose to as high as 0.95%, its highest level since 2011. For production and non-supervisory workers, wages are up just 2.22 percent over the past year. It fell 4.2 percent on the week. It was down 1.3 per cent at US$1,089.21 by 2:12 pm EST (1912 GMT). It tumbled 5 percent on the week.

The labor market bounced back strongly in October as employers added 271,000 jobs, bolstering the case for the Federal Reserve to raise interest rates next month. That 1.5 percent gain translates into annualized wage growth of 18 percent. Hourly pay packages also rose by 2.5 per cent, which was the fastest rise since July 2009 and comes after months of protests in several low-paid sectors.