US job growth surges in October; unemployment rate falls to 4.1%
SPY•US nonfarm payrolls rose by 165,000 in October, above economists’ forecast of 65,000, while the unemployment rate fell to 4.1%. August and September job gains were revised up by a combined 84,000.
1. Payrolls rise sharply
Nonfarm payrolls increased by 165,000 in October after a revised gain of 60,000 in September. Professional and business services added 70,000 jobs, healthcare added 42,000, transportation and warehousing added 25,000, and manufacturing added 19,000.
2. Unemployment and wages
The unemployment rate fell from 4.2% in September despite 421,000 people entering the labor force. Household employment rose by 463,000, while the number of people working part-time for economic reasons increased by 339,000 to 4.840 million. Wages rose 3.1% over the 12 months through October, and the average workweek held at 34.4 hours.
3. Rate expectations rise
Financial markets priced in a 76.8% chance of a Federal Reserve rate hike next month, up from 66.9% on Thursday. The dollar and Treasury yields rose after the report. Construction lost 3,000 jobs and leisure and hospitality lost 13,000.
