The US unemployment rate dropped to a 5-1/2 year low in October as 92,000 jobs were added and hiring in the two prior months was revised up, the government said on Friday, leading financial markets to slash bets on interest-rate cuts.
The stronger-than-expected job picture sent shock waves through financial markets. Bond prices fell while stock futures and the dollar moved higher on the signs of unexpectedly robust US hiring. The Labour Department said 92,000 jobs were added in October, less than the 125,000 that Wall Street analysts had forecast, but it said hiring in September and August was far stronger than it first estimated.
It revised up September's job-creation total to 148,000, or nearly three times the 51,000 it reported a month ago, and said there were 230,000 new jobs in August instead of 188,000. The unemployment rate fell in October to 4.4 percent from 4.6 percent in September. It was the lowest unemployment rate since 4.3 percent in May 2001.
"It's an extremely troubling report for the Fed and I can't see how the Fed would even contemplate cutting its benchmark rate when the unemployment rate sinks to cyclical lows," said economist Richard Yamarone of Argus research Corp in New York.
Average hourly earnings rose 0.4 percent to $16.91 - higher than the 0.3 percent that analysts had anticipated - while the average work week edged up to 33.9 hours from 33.8. Over the year, average hourly earnings have risen by 3.9 percent, the department said.
The monthly payroll report is calculated from two separate surveys, one of households and one of businesses. The household survey showed that a whopping 437,000 more people were employed in October. Most of the new hiring in October was in service industries, where 152,000 new jobs were created, while goods-producing industries shed 60,000 jobs.
Comments
Comments are closed.