Economy Added 271000 Jobs, Unemployment Fell to 5.0 Percent

The median forecast called for a 185,000 advance.

A range of research at the central bank suggests that even monthly job growth around 100,000 could be enough for policymakers to move ahead with a rate hike if other signals on the economy’s health don’t flash warning signs. “Both indicators will give the US Federal Reserve food for thought as it approaches its next policy meeting on 15-16 December, especially if any interest rate decision is truly data dependent”. That’s a big reason why the Federal Reserve passed on raising interest rates two months ago.

The calculation assumes the effective fed funds rate averages 0.375 per cent after the first increase.

“The weaker job gains in theprevious two months look like nothing more than speed bumps”, said Mark Zandi, chief economist for forecaster Moody’s Analytics.

“This is a better report than we have come to expect”.

“The Fed’s hawks will now argue that they have hard evidence in the most widely watched… data that the tightness of the labor market is pushing wage gains higher”.

With Americans spending more on everything from restaurant meals and clothing to new cars, employers added an impressive 271,000 jobs last month.

On Friday morning, the BLS announced the Latino unemployment rate stood at 6.3 percent, a minor decline from September’s 6.4 percent.

“The nation continues to bounce back from our worst economic crisis in generations”, said U.S. Labor Secretary Thomas Perez, later adding, “Private employers have now added 13.5 million jobs over 68 straight months of growth, the longest such streak on record”. While the S&P 500 is down 5.05 points or 0.2 percent at 2,094.88, the Dow is up 2.91 points or less than a tenth of a percent at 17,866.34 and the Nasdaq is up 5.11 points or 0.1 percent at 5,132.85.

Employment in October was led by the biggest gain in retail payrolls since November, the strongest hiring in construction in eight months and a pickup at temporary-help agencies. But the labour force participation rate, or the share of working-age Americans who are employed or at least looking for a job, held at a near 38-year low of 62.4%. Average hourly earnings were up 0.4%, versus the 0.2% expected, and the average workweek was static at 34.5 hours.

The unemployment rate dropped to 5%, the lowest level since 2008.

Fed officials said last month that they’d consider a rate increase at their next gathering, and Fed Chairwoman Janet Yellen this week echoed the view by saying December was a “live possibility”. Oil and gas drillers also shed workers as oil prices stayed low. Solid consumer demand has encouraged many services firms, which make up roughly 80 percent of the economy, to step up hiring.