San Francisco Federal Reserve bank president John Williams says interest rate

An increase in the Fed’s interest rate drives investors away from gold and towards assets with a return, as the precious metal bears no interest.

Oil prices decreased as the USA dollar rallied to its strongest level in almost seven months.

Fed fund futures, which are securities that bet on which way the Fed will move interest rates, now show roughly a 74 per cent chance of the central bank raising rates in December, up from 60 per cent on Wednesday and up from well below 50 per cent as recently as late summer. In addition, there was positive news on previous months, with the number of jobs created in August and September raised by a net 12,000.

“Our thesis on gold is the same as our thesis on the overall stock market – that the run up to the first rate hike will be a challenging environment”.

A few economists cautioned that the explosiveness of October’s job growth was likely in part a bounce back from the tepid gains in August and September, when fears about the global economy had led a few employers to hold back.

The Fed still has critics who say the economy isn’t as strong as it looks.

The USA job market improved in October far more than economists were expecting – and we mean far more. The unemployment rate, meanwhile, fell to 5.0 percent – its lowest since April of 2008.

The biggest gains in employment were seen in the construction, health care and retail sectors.

Consumer spending has been driving United States economic growth. With October’s jobs report, 13.7 million Latinos are not active in the labor force, which is an increase of at least 700,000 from October 2014.

At 5.0%, one has to accept that unemployment is close to what would normally be considered the tipping point from under employment to full employment by the Fed and many private economists.

The flurry of hiring is likely to give the Federal Reserve confidence to go ahead with a long-anticipated increase in short-term interest rates in December. Fed policymakers have made it clear that they want to raise interest rates sooner rather than later, and are just waiting for the data to show enough robust growth to step in.

That pushed the dollar sharply higher against the euro on optimism the USA economy may be stirring out of a fitful, uneven expansion into something more vigorous.

Fed officials said last month that they’d consider a rate increase at their next gathering, and Fed Chair Janet Yellen this week echoed the view by saying December was a “live possibility”. That was the biggest increase since July 2009 and could give Fed officials confidence that inflation will gradually move towards their 2 percent target.

And a broader measure of unemployment – that includes part-time workers and discouraged Americans who have given up job searches, as well as the unemployed – fell to 9.8% from 10%.

Locally, the transportation and warehousing sector was up by 2.6 percent over the year in September while employment in the local wholesale trade industry rose by 3.2 percent over the year. The median forecast called for a 185,000 advance.