Economy

JOBS BOOM: US Companies Add a Robust 227000 Jobs in October

JOBS BOOM: US Companies Add a Robust 227000 Jobs in October

Stock and bond prices moved lower after the Bureau of Labor Statistics issued a strong-than-expected employment report for October, which bolsters the case for the Federal Reserve to push ahead with interest-rate increases this year and next. President Donald Trump cheered the robust report, which came less than a week before the midterm elections that will decide who controls the U.S. Congress.

President Trump seized the moment in a tweet.

The Dow Jones Industrial Average was off about 200 points, or 0.8%, at 25,193 in early afternoon after rising initially following the strong jobs news, which featured a 250,000 rise in nonfarm payrolls last month, better than 50,000 above economists' consensus guesses.

According to the Labor Department, healthcare added 36,000 jobs, manufacturing added 32,000 jobs and construction added 30,000 jobs. Data for September was revised to show 118,000 jobs added instead of the previously reported 134,000.

Economists polled by Reuters had forecast payrolls would increase by 190,000 jobs in October and the unemployment rate would be unchanged at 3.7 percent. Michael had "no discernible effect" on national employment and unemployment estimates for October, the Labor Department said.

Last week, the government estimated that the U.S. economy grew at an annualised rate of 3.5 percent in the third quarter, above Wall Street expectations. The average workweek increased to 34.5 hours from 34.4 hours in September.

The wage gains are coming at a time of record profits for USA companies after Trump and congressional Republicans enacted the biggest corporate tax rate cut in the nation's history.

U.S. stock futures declined after the report, while the dollar trimmed losses and 10-year Treasury yields were higher.

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Employers also increased hours for workers last month.

Firming wages support views that inflation will hover around the Fed's 2.0 percent target for a while. At the same time, "The attention will shift toward trade but also the Fed", which could raise interest rates another three or four times in 2019, he said. That could lower the government's employment count when it's released Friday.

The Fed is not expected to raise rates at its meeting next Wednesday, but economists believe strong labor market data could see the United States central bank signal an increase in December. "Market participants will likely need to adjust their expectations going forward".

And Diane Swonk of Grant Thornton noted that while wages are rising, benefits have not recovered, despite comments from employers that they are beefing up perks to attract and retain workers. There are a record 7.14 million open jobs.

Wages jumped. Average monthly earnings increased 3.1 percent from the year before, the first time in the current economic expansion that the figure has crossed the 3 percent mark.

Trump and Republican candidates painted the jobs report as further proof of an economic boom, but many independent economists warn that growth has probably peaked and that it is likely there will be a slowdown, especially if trade tensions continue to escalate.

The unemployment rate is a 49-year-low, while Hispanic unemployment rate reached its lowest rate ever at 4.4%. For prime-age women, this employment-to-population ratio is the highest it has been since July 2001. Teenage unemployment dropped last month to 11.9 per cent, the lowest since 1969.

Manufacturing jobs had been expected to grow by just 13,000 in October, which typically is a weak month in that category.


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