Hiring by U.S. employers remained healthy in October as wage growth accelerated to its strongest pace since the recession, signaling solid momentum in the labor market and broader economy just days before American voters elect a new president.
Nonfarm payrolls rose by a seasonally adjusted 161,000 in October from the prior month, following September’s upwardly revised gain of 191,000, the Labor Department said Friday.
The report “was not a shocker, but it was definitely on the strong side,” Amherst Pierpont Securities chief economist Stephen Stanley said in a note to clients. The unemployment rate, derived from a separate survey of American households, ticked down to 4.9% last month from 5% in September because the labor force shrank. The labor-force participation rate edged lower, to 62.8% in October from 62.9% the prior month, but remained elevated from its October 2015 level of 62.5%.
Economists surveyed by The Wall Street Journal had expected 173,000 new jobs and a jobless rate of 4.9% in October.
A highlight from Friday’s report: Average hourly earnings for private-sector workers rose 2.8% in October compared with a year earlier, the strongest annual wage growth since June 2009.
The report, with its evidence of a tightening labor market, likely keeps the Federal Reserve on track to potentially raise rates at its mid-December policy meeting.
“The solid gain in employment and the acceleration in average hourly earnings growth in October will increase expectations that the Fed will hike interest rates in December,” said Paul Ashworth, chief U.S. economist at Capital Economics, in a note to clients. He added, though, that his prediction assumes “that the election doesn’t throw a spanner in the works.”
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