Rise in US hires set to push Fed to lift rates
Print Edition
US hiring roared back in October after two weak months, with employers adding a robust 271,000 jobs and likely setting the stage for the Federal Reserve to raise interest rates next month.
The unemployment rate dipped to a fresh seven-year low of 5 percent from 5.1 percent.
The burst of hiring, the most since December, filled jobs across a range of industries as companies shrugged off slower overseas growth and a weak US manufacturing sector. Significant job gains occurred in construction, health care and retail.
Yesterday’s report from the government suggested that the US economy is rebounding after a worrisome summer and is continuing to outshine most other major economies. During August and September, hiring had flagged amid financial turmoil in China and faltering growth in Europe and emerging markets.
Even so, American consumers have kept spending at a healthy pace, supporting strong job growth even as factory payrolls were flat last month and oil and gas drillers cut jobs.
After a prolonged period of relatively stagnant pay raises for many Americans, last month’s robust hiring also raised wages 9 cents to US$25.20. That is 2.5 percent higher than 12 months ago, the largest year-on-year gain since July 2009. That is comfortably above inflation, which was been flat in the past year.
“This is a fantastic jobs number at this point in the recovery, and we’re also finally seeing strong wage gains,” said Tara Sinclair, chief economist for job site Indeed. “This data tips the scales toward a rate hike in December, but more importantly is a sign that our economy may have more punch than we thought.”
Retailers added nearly 44,000 jobs in October, the most since November last year, a sign that they are preparing for strong sales over the winter holidays. Hotels and restaurants added 41,000.
Many higher-paying sectors also enjoyed healthy gains, including professional and business services, which includes lawyers, architects and engineers. That sector added 78,000 positions, the most in nearly a year. Those gains also included nearly 25,000 temporary jobs.
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