US adds 250,000 jobs in October; unemployment rate steady

Washington, USAUpdated: Nov 02, 2018, 08:47 PM IST
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Representative image. Photograph:(Zee News Network)

The US economic engine brushed past last month's Hurricane Michael to continue its robust job creation while giving workers a fat pay bump, the government reported Friday.

In a welcome development for Republicans ahead of next week's bitter midterm vote, American employers added 250,000 net new positions in October, handily overshooting forecasts, while salaries rose at the fastest rate since 2009, the Labor Department said.

Unemployment held steady at 3.7 per cent, a 48-year low.

The result was a surprise as some economists had expected the hurricane that made landfall on the Florida panhandle in the middle of the employment survey week to depress reports of hiring and worker pay.

Instead, officials said the storm, which disrupted business and life for millions, produced "no discernable effect" on the estimates.

Companies kept right on hiring in healthcare, manufacturing, construction, transportation and warehousing.

But perhaps more significant, average hourly earnings, a closely watched measure of worker pay, rose 0.2 per cent from September, putting wages 3.1 per cent above the year-ago level -- the fastest gain since April 2009.

Sluggish worker pay gains despite the healthy jobs market had baffled economists, and the gain now is well above the 2.3 per cent pace of consumer inflation.

The transportation equipment sector added 21,000 workers, within which the key auto industry accounted for 6,800 positions.

In another dose of good news, the American workforce grew by 711,000 people, lifting the labour force participation rate 0.2 percentage points to 62.9 per cent, after holding stubbornly stable through the economic recovery.

The share of the population in the workforce also rose 0.2 to 60.6 per cent.

The Federal Reserve is not expected to raise interest rates when it meets to consider monetary policy next week, but the latest jobs report likely solidifies the case for the rate hike expected in December.

President Donald Trump has expressed outrage at the Fed's current tightening cycle, after three hikes this year.

But with unemployment flirting with historic lows and the economy juiced by tax cuts, stimulus and steady job creation, economists say policymakers will feel they have little choice but to continue raising rates to stave off inflation and prevent the economy from overheating.