Last Updated Nov 6, 2015 9:25 AM EST
The U.S. economy in October recorded its largest jump in employment this year, as Americans also took home larger paychecks and the jobless rate declined to 5 percent. The labor market’s resilience bolsters the case for a hike in interest rates by the Federal Reserve next month.
“It’s a very positive report,” JJ Kinahan, chief strategist for TD Ameritrade, said. “More people are working, nothing solves economic ills like people having money in their pocket, and continue to buy homes and clothes. As we head into the retail season, it could be a bright one for retailers.”
The U.S. economy added 271,000 jobs in October, the Labor Department said Friday, surpassing analysts’ expectations of 185,000 jobs. Average hourly earnings gained 0.4 percent from September, the most in more than six years, after a 2.3 percent rise the month before.
Interest rates have been at record lows since the 2008 financial crisis. Testifying before a committee of the U.S. Congress on Wednesday, Fed Chair Janet Yellen described the U.S. economy as “performing well” and said an interest rate hike in December was a “live possibility.”
“It seems hard to believe the Fed isn’t looking at this and saying, ‘we may have to do something here’.” said Kinahan. “The probability of a December hike just flew up to 73 percent. Going into the last Fed meeting that number was 33 percent.”
A separate report earlier this week by ADP said private businesses added 182,000 jobs last month, but the Labor Department’s survey is more comprehensive.
Friday’s report contained some revisions: September’s job growth was revised down to 137,000, from 142,000; August’s numbers were revised up to 153,000, from 136,000.
This entry passed through the Full-Text RSS service – if this is your content and you’re reading it on someone else’s site, please read the FAQ at fivefilters.org/content-only/faq.php#publishers.