Article by ForexTime
The U.S. nonfarm payrolls data showed a surge in jobs in October and the unemployment rate hit a 7-1/2-year low of 5.0 percent. This indicated economic strength that makes it much more likely the Federal Reserve will raise interest rates in December.
Nonfarm payrolls increased 271,000 last month, the largest rise since December 2014, the Labor Department said on Friday. In addition, average hourly earnings rose a respectable 9 cents. The payrolls jump followed modest gains in August and September.
Economists had forecast nonfarm payrolls increasing 180,000 last month and the unemployment rate remaining at 5.1 percent.
In addition to the unexpectedly stronger job gains last month, data for August and September were revised to show 12,000 more jobs created than previously reported.
Last month’s rise in wages, which have been almost stagnant despite a tightening labor market, lifted the year-on-year reading to 2.5 percent. That was the biggest increase since July 2009 and could give the Fed confidence that inflation will gradually move towards its 2 percent target.
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The unemployment rate now stands at its lowest level since April 2008 and is in a range many Fed officials see as consistent with full employment.
For most Fed officials who have commented, average monthly payroll growth of more than 180,000 since August is more than enough for them to be satisfied the job market is tightening at a strong enough pace.
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