Jobless Rate Little Changed For People With Disabilities

The economy generated 271,000 new jobs last month, with all but 3,000 coming in the private sector, the government said Friday, topping the MarketWatch-compiled economist consensus for 180,000 jobs created.

United States job growth surged in October and the unemployment rate hit a 7-1/2-year low of 5.0 per cent in a show of economic strength, sending the dollar up 1.4 per cent to the highest since April.

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. Jim O’Sullivan, chief US economist at High Frequency Economics, estimated that hiring would only need to clock in at 59,000 jobs a month over time to keep the unemployment rate steady.

But that didn’t happen in the ’90s and it hasn’t happened recently, either.

Stocks were lower in early trading Friday following a surprisingly strong October jobs report that sets the stage for a potential interest rate hike next month.

Wages have generally remained stagnant in recent months, but average hourly earnings jumped by 9 cents in October to $25.20. The sharp drop in oil prices over the last year has led to strong growth in real wages over this period, but there has been little change in the pace of nominal wage growth over the last five years.

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Matt Friedman, chief executive of the Wing Zone restaurant chain, said he thinks lower gas prices are encouraging more people to eat out and boosting sales at his company’s 93 US sites.

The gains are likely strong enough for the Federal Reserve to lift short-term interest rates at the next meeting of its Federal Open Market Committee on December 15-16.

“The Fed is way behind the curve on the labor market side, and if the current economic momentum is sustained, then the Fed is going to have to hike rates less gradually and ultimately by more than either the FOMC itself or market participants now believe”. That was the biggest increase since July 2009 and could give Fed officials confidence that inflation will gradually move towards their 2 percent target. “The two summer months that were low now look like the aberration”.

The mining sector has shed 109,000 jobs since peaking in December 2014. That’s the rate the Feds charge banks for overnight loans – their version of the float, which, in turn, affects the cost of borrowing at banks and the interest paid on savings accounts. Average pay is up 2.5 percent in the past year, the largest annual gain since 2009.

The participation rate, which shows the share of working-age people in the labor force, held at 62.4 percent.

Economists expect growth to rebound to 2.5 percent or more in the final three months of the year.

“It’s not only expected that we are seeing a few slowdown”, San Francisco Fed President John Williams told reporters in October.