Unemployment rate stays at 3.7% as 250K jobs added in October

Unemployment rate stays at 3.7% as 250K jobs added in October

The Labor Department's monthly jobs report, the last major economic data before the November 6 election, also shows the unemployment rate remained at a five-decade low of 3.7 percent.

Stock and bond prices moved lower after the Bureau of Labor Statistics issued a strong-than-expected employment report for October, which bolsters the case for the Federal Reserve to push ahead with interest-rate increases this year and next.

Last month, employment in the leisure and hospitality sector increased by 42,000 jobs after being unchanged in September.

"This is the best labor environment in over a decade", said Joseph Brusuelas, chief economist at RSM U.S., an worldwide consulting firm.

The labor-market data would likely keep the Federal Reserve on track to gradually lift its benchmark interest rate. Meanwhile, the USA trade war with China poses a risk to further gains and companies may be slowing capital investment.

"Tariffs have done little to dent America's appetite for imports", said Emily Mandel, an economist at Moody's Analytics in West Chester, Pennsylvania.

"The updated information released today suggests that the labor market remains strong and inflation remains manageable, supporting our call that the Fed will raise its key policy rate in December", Duncan said.

But perhaps more significant, average hourly earnings, a closely watched measure of worker pay, rose 0.2% from September, putting wages 3.1% above the year-ago level - the fastest gain since April 2009. "The trade deficit will remain a drag on the economy". Furthermore, the pace of hiring is robust, especially after accounting for hurricane distortions. "Keep it going, Vote Republican!"

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Among economists, there was wider agreement that the jobs report pointed to strength in the USA economy, despite recent worries that weakness may be emerging in some sectors such as housing and trade.

Trump's approval ratings in Gallup's weekly poll have been mired in a narrow range between 38 percent and 44 percent since September, a level that historically corresponds with losses for the president's party in midterm elections.

Meanwhile, Presidential Advisor Ivanka Trump continues her work to bridge the gap between a historic number of job openings and necessary skill sets for workers. Last year, it looked like the pace of job growth had started to slow, as a business cycle expansion now its ninth year began showing its age. Hourly wages rose 5 cents for the period, to $27.30. The personal consumption expenditures price index excluding the volatile food and energy components has increased 2.0 percent for five straight months.

But overall, economists say wage growth, particularly over the past three months, is a positive sign that employers are starting to pay more to attract workers in a tightening labor market.

Hasset said Trump respects the independence of the Fed. The continued hiring and wage increases also reflect a tax-cut boost and reinforce expectations that the central bank will raise interest rates for a fourth time this year in December, though such an outlook may further unsettle investors who just sent U.S. stocks to their worst month since 2011.

Low wages in many sectors have contributed to financial instability. J.B. Hunt Transport Services Inc. and retailers Costco Wholesale Corp. and Target Corp. are among companies that have either promised or delivered higher wages.

Manufacturing jobs jumped by 32,000, with the largest gains stemming from goods production. At the same time, continued growth in wages may intensify investors' concerns about inflation and how this could spur faster rate hikes from the Fed. "Salt Lake City is becoming more competitive, but people there are looking for a good culture and tend to stay with you longer".

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