U.S. Jobs Rise Unexpectedly in October; Unemployment Rate Falls to 4.1%

【Lee Byung-cheol, Financial News correspondent in New York】New job creation in the U.S. in October came in at nearly three times market expectations, signaling a stronger-than-expected labor market. The unemployment rate also fell to 4.1%, while wage growth exceeded market forecasts, and the possibility of a December interest rate hike by the Federal Reserve (Fed) is expected to gain traction.
The U.S. Department of Labor said in its October jobs report, released on the 6th local time, that nonfarm payrolls rose by 165,000 from the previous month. That was about 2.8 times the market estimate of 59,000 compiled by Dow Jones.
The unemployment rate came in at 4.1%, below the market estimate of 4.2%. However, the broader U-6 unemployment rate, which includes discouraged job seekers and people working part time for economic reasons, rose 0.3 percentage points from the previous month to 7.9%.
Employment gains for the previous two months were also revised sharply upward. August job growth was revised to 186,000, an increase of 53,000 from the previous figure, while September was revised to 60,000, up by 31,000. That means the combined increase in new jobs for the two months was 84,000 higher than previously reported.
Wage growth was also stronger than expected. Average hourly earnings rose 0.4% from the previous month and 3.1% from a year earlier in October. Those figures exceeded market estimates of 0.3% and 2.9%, respectively. The average workweek was 34.4 hours, unchanged from the previous month.
By industry, professional and business services led job growth, adding 70,000 jobs. The health care sector added 42,000. Transportation and warehousing gained 25,000 jobs, while manufacturing added 19,000. Job growth, which had been concentrated in health care, now appears to be spreading to other industries.
Markets expect the jobs report to support the Fed’s further-tightening stance. With inflation still above the Fed’s 2% target and employment and wages also showing stronger-than-expected trends, analysts say the case for another interest rate hike at the Federal Open Market Committee (FOMC) meeting in December has strengthened.




[email protected] Correspondent Lee Byung-cheol Reporter