Published: Mon, November 05, 2018
Money | By Wilma Wheeler

US economy adds a robust 250,000 jobs in October

US economy adds a robust 250,000 jobs in October

The prospect of interest rates rising faster than financial markets anticipate has roiled the United States stock market and a strong report on Friday could renew selling on Wall Street. Add Jobs Report as an interest to stay up to date on the latest Jobs Report news, video, and analysis from ABC News.

USA businesses added 250,000 jobs in October, the Labor Department said on Friday-a blowout number that surpassed Wall Street's expectation.

Friday's employment report from the government pointed to a consistently robust job market that shows no sign of flagging even with the economy in its 10th year of expansion. The continued hiring and wage increases also reflect a tax-cut boost and reinforce expectations that the central bank will raise interest rates for a fourth time this year in December, though such an outlook may further unsettle investors who just sent U.S. stocks to their worst month since 2011.

Those higher wages may be drawing more people into the labor market.

The influx of new job seekers in October increased the proportion of Americans with jobs to its highest level since January 2009.

For a US economic expansion now in its 10th year, hiring remains robust, growth has picked up and the outlook is a mostly bright one on the eve of congressional elections.

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 strong job growth and bigger pay increases will likely encourage the Federal Reserve to keep raising short-term interest rates. Most analysts expect the Fed to resume its rate hikes in December.

Hurricane Michael, which hit the Florida Panhandle and Georgia last month "had no discernible effect on the national employment and unemployment estimates for October", the Labor Department said.

The Fed is not expected to raise rates at its policy meeting next week, but economists believe October's strong labor market data could see the US central bank signal an increase in December. Some economists noted Friday that Hurricane Florence, which struck the Carolinas in September, may have moved some hiring from that month to October. Professional and business services 35,000. So far, hiring in the manufacturing sector does not appear to have been affected by the White House's protectionist trade policy, which has contributed to capacity constraints at factories.

Construction employment rose by 30,000 in October, with almost half of the gain occurring among residential specialty trade contractors. This would boost the annual increase in the wages to 3.1 percent, the biggest gain since April 2009, from 2.8 percent in September. Combined, the two quarters produced the strongest six-month stretch of growth in four years. Higher tariffs on Chinese imports have raised costs for many manufacturers.

Participation rate increased to 62.9 per cent from 62.7 per cent the prior month; measure tracks share of working- age people in labor force. There are also signs that pay hikes are taking hold more firmly: Amazon.com Inc. just raised its minimum hourly wage to $15 for US employees. "That translates into more consumer consumption and a lovely picture in terms of growing the economy into next year". The Fed's credit tightening has led to higher rates for the average 30-year fixed mortgage - 4.8 percent, up from 3.9 percent a year ago.

That's forcing more companies to raise pay to attract and keep workers. That trend, in turn, can accelerate inflation. But for now, inflation remains right around the Federal Reserve's target of 2 percent. Inflation is 2.3%, so after accounting for that, consumer purchasing power is rising by less than 1%.

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