Unemployment rates fall to 5 percent

GAINERS AND LOSERS: The possibility of higher interest rates changes the dynamics for investors in several ways.

“The employment report had everything you could have asked for”.

The reaction in financial markets was swift and sharp.

“Metals have breached their respective key support levels on dollar hitting multi-month high”. December palladium tacked on $6.65, or 1.1%, to $612.95 U.S.an ounce, rebounding after a 2.7% loss a day earlier.

The economy added 271,000 jobs in October, according to data released Friday by the U.S. Bureau of Labor Statistics.

Other Fed officials need to add their voices to Yellen’s in re-affirming that what matters for the US economy and markets (and, therefore, for the global system as a whole) isn’t when the Fed hikes first but where it will stop the cycle and how it will get there.

Wall Street has been in a months-long guessing game about the Federal Reserve, trying to figure out when the policymakers at the nation’s central bank will finally raise interest rates.

On Wednesday, Fed Chair Janet Yellen described the economy as strong, despite the slower job growth seen in August and September.

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. That compared with only 12 dealers in September.

ING Bank economist, Rob Carnell, said United States rates looked nearly certain to rise in December unless the next jobs report in November was “catastrophically bad”.

Nationally, there were 387,000 jobs in the motion picture and sound recording sector in October, up from 380,100 in September and up 4.5 percent from 370,400 a year ago.

Gold futures collapsed to a three-month low as a strong USA jobs report quelled concerns over domestic growth and bolstered the dollar. 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 unemployment rate, the lowest since April 2008, is at 5.0%.

Still, Americans boosted their spending at a healthy 3.2 percent annual pace, down just a few tenths from the second quarter.

The agency also says that the number of people who are “involuntary part-time workers” due to reduced hours or the difficulty of finding a full-time job “edged down by 269,000 to 5.8 million in October”. Oilfield services provider Schlumberger NV (SLB.N) last month announced further layoffs in addition to the 20,000 jobs it has already eliminated.

Production of durable goods, in fact, showed a decrease of 3,000 payrolls despite increases in the automotive sector, but it was offset by gains in nondurable goods.

Job creation was strongest in professional and business services, healthcare, retailing, restaurants and bars and construction. A measure of service-sector activity and employment, along with online job ads, rose last month. The contract’s volume surged almost 49,500 lots between in the half hour that followed the jobs report, the biggest 30-minute burst of volume for the most active contract in a year.