NEW YORK, Nov 6 (Reuters) – US nonfarm payrolls rose more than expected in October and the unemployment rate fell to 4.1%, suggesting the labor market remained resilient and giving the Federal Reserve more scope to focus on inflation stemming from the Middle East conflict.
Payrolls rose by jumped by 165,000 jobs last month after an upwardly revised 60,000 gain in September, the Labor Department’s Bureau of Labor Statistics said on Friday. Economists polled by Reuters had forecast payrolls advancing 65,000 after a previously reported 29,000 increase in September.
The unemployment rate declined from 4.2% in September.
MARKET REACTION:
STOCKS: US stock futures were mixed following the report, with futures tracking the Nasdaq up 1.4% and those tied to the S&P 500 up 0.3%.
BONDS: Treasury yields rose after the data was released before pulling back, with the 2-year yield up 5 basis points at 4.52%, the 10-year yield up 4 basis points at 4.88% and the 30-year yield up 3.6 basis points at 5.29%.
FOREX: The US dollar index was up 0.7% to 102.18.
RATE EXPECTATIONS: Bets that the Fed will raise rates next month rose to 78% following the data from 70% earlier.
COMMENTS:
BRIAN JACOBSEN, CHIEF ECONOMIC STRATEGIST, ANNEX WEALTH MANAGEMENT, MENOMONEE FALLS, WISCONSIN:
“I guess the Fed was right to upgrade its economic assessment from solid to strong, at least based on the October employment report. The headline number blew the consensus out of the water by 100,000. The back-month revisions added 84,000 more jobs.
“Average hourly earnings grew what would usually be a respectable 3.1% year-over-year, but when inflation was higher than that, real average hourly earnings declined. That’s the affordability crisis in one stat.
“Fixing affordability is above my pay grade and even above Congress’s pay grade when it is driven by high oil prices. The vice president, and even the president, are acknowledging that. Lower oil prices, lower gasoline prices, lower inflation, and less pressure on the Fed to hike could help so many areas of the economy that an AI datacenter buildout slowdown might end up not being the growth killer so many people think it could be.”
PETER CARDILLO, CHIEF MARKET ECONOMIST, SPARTAN CAPITAL SECURITIES, NEW YORK:
“This is a good number. It shows that the labor market is extending a long period of growth. The downtick in total unemployment — not too sure why that happened, because the participation rate actually went up.
“Hourly wages were a little bit higher than we were looking for. With a 4% unemployment rate, we are at full employment, right? The jobs market is at full capacity. So with the early wages moving up to 3.1% on a yearly basis, that just confirms that the Fed has no choice but to raise rates in December. And the question is, do they raise by 25 basis points or by 50 basis points?”
(Reporting by Lucia Mutikani, Stephen Culp, Chuck Mikolajczak; editing by Colin Barr)
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