U.S. creates 271,000 jobs in October as labor market heats back up
Published: Nov 6, 2015 9:09 a.m. ET
Unemployment rate falls to 5%, biggest wage gains since 2009
By
JEFFRYBARTASH
REPORTER
WASHINGTON (MarketWatch) — Companies added new jobs in October at the fastest pace of 2015, knocking the U.S. unemployment rate down to a seven-year low and setting the stage for the Federal Reserve to raise interest rates before the year ends.
The economy generated 271,000 new jobs last month, with all but 3,000 coming in the private sector, the government said Friday, topping the MarketWatch-compiled economist consensus for 180,000 jobs created. Almost every major industry boosted payrolls.
Just as important, a long-awaited acceleration in wages might finally be happening. Hourly pay rose at the fastest year-over-year pace since the U.S. exited recession in mid-2009. Economists have been expecting a faster increase in pay amid a deep drop in unemployment and the creation of millions of new jobs over the past several years.
The unemployment rate, meanwhile, fell to 5% from 5.1%, marking the lowest level since April 2008. More people also entered the labor force in search of work, a sign that jobs are available.
The sharp rebound in hiring last month eases worries about a softening labor market after job creation suddenly slowed in August and September. Employment gains were a combined 12,000 higher in those two months than previously reported, the Labor Department said.
The latest employment report offers concrete evidence the U.S. remains on a solid growth path despite turmoil in the global economy and tougher times for some domestic industries such as manufacturing and energy.
The Fed is prepared to raise its benchmark short-term rate for the first time since 2006, and the October jobs report will likely bring policy makers to the precipice. Top officials won’t meet again until after the November jobs report, however, so the Fed can wait for more confirming evidence.
Stock futures SPZ5, -0.44% soured after the report, while yields on Treasurys climbed.
Inside the report
The rebound in hiring in October was driven almost entirely by companies that offer services such as software design, banking, health care, shopping and eating out.
White-collar businesses added 78,000 profession jobs. Health care added 45,000 positions. Retailers took on 44,000 new workers, and restaurants hired 42,000 people.
Builders also beefed up employment by 31,000, reflecting an upturn in construction over the past year.
The only two industries that continue to struggle are energy and manufacturing, reflecting the diverging fortunes of companies that produce goods and those that offer services.
Export-intensive manufacturers that make goods such as heavy machinery and companies that extract fossil fuels have been battered by a strong dollar and plunging oil prices. Employment in the manufacturing sector was unchanged in October, and energy producers cut jobs for the 10th month in a row.
The labor market as a whole, however, is still the healthiest it’s been in years. The U.S. has added an average of 206,000 jobs a month in 2015.
As a result, the number of people who can’t find work or who can only get part-time jobs continues to shrink. The so-called U6 unemployment rate that takes these people into account dropped to 9.8% in October, the first time it’s fallen below 10% since May 2008.
The labor market is still not fully healed, however. Some 15.6 million Americans who want a full-time job can’t find one, an unusually high number after more than six years of economic recovery.
The percentage of able-bodied people 16 or older in the labor force also sits at a 42-year low. It was unchanged at 62.4% in October.
Published: Nov 6, 2015 9:09 a.m. ET
Unemployment rate falls to 5%, biggest wage gains since 2009
By
JEFFRYBARTASH
REPORTER
WASHINGTON (MarketWatch) — Companies added new jobs in October at the fastest pace of 2015, knocking the U.S. unemployment rate down to a seven-year low and setting the stage for the Federal Reserve to raise interest rates before the year ends.
The economy generated 271,000 new jobs last month, with all but 3,000 coming in the private sector, the government said Friday, topping the MarketWatch-compiled economist consensus for 180,000 jobs created. Almost every major industry boosted payrolls.
Just as important, a long-awaited acceleration in wages might finally be happening. Hourly pay rose at the fastest year-over-year pace since the U.S. exited recession in mid-2009. Economists have been expecting a faster increase in pay amid a deep drop in unemployment and the creation of millions of new jobs over the past several years.
The unemployment rate, meanwhile, fell to 5% from 5.1%, marking the lowest level since April 2008. More people also entered the labor force in search of work, a sign that jobs are available.
The sharp rebound in hiring last month eases worries about a softening labor market after job creation suddenly slowed in August and September. Employment gains were a combined 12,000 higher in those two months than previously reported, the Labor Department said.
The latest employment report offers concrete evidence the U.S. remains on a solid growth path despite turmoil in the global economy and tougher times for some domestic industries such as manufacturing and energy.
The Fed is prepared to raise its benchmark short-term rate for the first time since 2006, and the October jobs report will likely bring policy makers to the precipice. Top officials won’t meet again until after the November jobs report, however, so the Fed can wait for more confirming evidence.
Stock futures SPZ5, -0.44% soured after the report, while yields on Treasurys climbed.
Inside the report
The rebound in hiring in October was driven almost entirely by companies that offer services such as software design, banking, health care, shopping and eating out.
White-collar businesses added 78,000 profession jobs. Health care added 45,000 positions. Retailers took on 44,000 new workers, and restaurants hired 42,000 people.
Builders also beefed up employment by 31,000, reflecting an upturn in construction over the past year.
The only two industries that continue to struggle are energy and manufacturing, reflecting the diverging fortunes of companies that produce goods and those that offer services.
Export-intensive manufacturers that make goods such as heavy machinery and companies that extract fossil fuels have been battered by a strong dollar and plunging oil prices. Employment in the manufacturing sector was unchanged in October, and energy producers cut jobs for the 10th month in a row.
The labor market as a whole, however, is still the healthiest it’s been in years. The U.S. has added an average of 206,000 jobs a month in 2015.
As a result, the number of people who can’t find work or who can only get part-time jobs continues to shrink. The so-called U6 unemployment rate that takes these people into account dropped to 9.8% in October, the first time it’s fallen below 10% since May 2008.
The labor market is still not fully healed, however. Some 15.6 million Americans who want a full-time job can’t find one, an unusually high number after more than six years of economic recovery.
The percentage of able-bodied people 16 or older in the labor force also sits at a 42-year low. It was unchanged at 62.4% in October.
