Dive Brief:
- The jobless rate dipped to 4.1% last month as employers expanded payrolls by 165,000, the Bureau of Labor Statistics said Friday, describing a labor market that shattered expectations.
- Hiring was especially robust in professional and business services, health care, and transportation and warehousing, the BLS said, noting that since March the unemployment rate has hovered between 4.1% and 4.3%.
- With real wages having fallen for most of the 96% of the labor force with jobs this year, “many people don’t realize how stunningly good the labor market is,” Jason Furman, chairman of the Council of Economic Advisers from 2013 to 2017, said in a note. Nevertheless, October marks “the 60th month with unemployment at or below 4.5% — the most sustained streak of low unemployment on record,” according to Furman, a Harvard University economist.
Dive Insight:
A consistently low jobless rate indicates that the Federal Reserve is meeting its obligation to ensure maximum employment and, after more than five years with inflation exceeding the Fed’s 2% target, can concentrate on its other congressional mandate to achieve price stability, analysts said.
“The strong October jobs report should keep the Fed focused on inflation and on track to hike again in December,” Bank of America Securities analysts said Friday, referring to the central bank’s decision last month to raise the federal funds rate by a quarter point.
“Dovish arguments based on lingering softness in the labor market look less compelling after the October data,” they said in a note.
Following the release of the jobs data, traders in interest rate futures increased the odds that policymakers will raise the main interest rate by a quarter point in December to 77% from 67% on Thursday, according to CME Group’s FedWatch tool. The benchmark rate is currently set at a range from 3.75% to 4%.
In another encouraging sign for labor market stability, the BLS revised up its job growth for August and September by a total of 84,000 positions.
All was not bright for employed Americans in October. The number of people working part-time rose by 339,000 to 4.8 million, the BLS said, noting that they were unable to find full-time jobs or employers had cut their work hours.
Also, average hourly earnings rose 3.1% in October from a year earlier, lagging the pace of inflation.
The Consumer Price Index rose 3.7% in September, fueled primarily by a 9.1% surge in the price of gasoline, according to the BLS.
Bedeviled by waning buying power, voters on Tuesday subjected Republican lawmakers at the national and state level to one of their biggest electoral defeats in decades.
Democrats took control of the Senate with at least 54 seats and, in the House of Representatives, will likely win a total of 259 seats, far exceeding the 218 required for a majority, according to an estimate by NBC News.
