US firms hire new workers briskly
Print Edition
US employers likely hired new workers at a fairly brisk clip last month, underscoring the economy’s resilience in the face of slowing global demand.
Employers probably added 231,000 new jobs to their payrolls after boosting them by 248,000 in September, according to a Reuters survey of economists. The jobless rate is forecast holding steady at a six-year low of 5.9 percent.
“It all speaks to the story that the US can sustain pretty strong growth even when there are concerns about growth slowing in places like China and the eurozone,” said Jeff Greenberg, a senior economist at JP Morgan Private Bank in New York.
Job growth has exceeded 200,000 in seven of the last eight months, sufficient strength to keep the economy on a higher growth path after it expanded 3.5 percent in the third quarter. The relatively strong pace of job gains also signals that the slack in the labor market is being absorbed.
The Federal Reserve last month struck a fairly upbeat tune on the jobs picture as it ended its bond buying program, dropping its characterization of labor market slack as “significant” and replacing it with “gradually diminishing.”
Sturdy job gains on their own, however, will probably not be enough to convince the US central bank to start raising interest rates before the second half of 2015 given a still low level of inflation. Wage growth has been the missing piece of the jobs recovery and without sharp increases, most economists say the Fed will be in no rush to lift benchmark lending rates that it has kept near zero since December 2008.
The employment report is set to show that average hourly earnings rose 0.2 percent last month after being flat in September. That would leave the annual change at a tepid 2.1 percent.
But other data have begun to show wage growth accelerating.
“I don’t think anybody will be surprised if we start seeing ... a modest firming up of wages,” said Anthony Karydakis, chief economic strategist at Miller Tabak in New York. “This will be a welcome development for the Fed, but not something that will make them move sooner rather than later.”
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