America's employment situation was much more robust than expected last month, as the Labor Department reported October job growth that was well ahead of estimates, shrinking unemployment, and accelerating wages.
The U.S. Bureau of Labor Statistics reported Friday that nonfarm payrolls (NFP) increased by 165,000 in October, shattering Dow Jones-polled economists' expectations for expansion of 59,000. Jobs totals for the prior two months were sharply revised upward by a total of 84,000 jobs. September's payrolls were adjusted to 60,000 from 29,000, while August's sum moved to 186,000 from 133,000 before.
The unemployment rate slipped back to 4.1%, while economists were looking for it to stay flat at 4.2%. Average hourly earnings were stronger than economists were projecting, growing by 0.4% month-over-month, to $38.00. On a year-over-year basis, that's 3.1% higher, which was better than estimates for 2.9%; that marked a significant bounce off the prior-month's YoY rate, which was the slowest wage growth in more than five years.
Here's a brief look at the October jobs report's most pertinent details:
- Oct payrolls: +165,000 (Est.: +59,000)
- Oct unemployment: 4.1% (Est.: 4.2%)
- Oct hourly earnings: +3.1% YoY (Est.: +2.9%)
- Sep payrolls (revised): +60,000 (Prev.: +29,000)
- Aug payrolls (revised): +186,000 (Prev.: +133,000)
The report follows a laundry list of other positive jobs data, including a strong private-sector report from ADP (+86,000 jobs in October), low unemployment claims, and a multiyear October low in Challenger layoff announcements.
The CME FedWatch Tool, which uses Fed funds futures prices to track the probability of a change to the federal funds rate, now shows a 73% chance that the Federal Reserve will raise its benchmark rate from a range of 3.75%-4.00% to a range of 4.00%-4.25% when the FOMC meets Dec. 8-9. That's up from 67% yesterday.
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This report will be updated.
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