The rebound in the labor market in October increases the probability significantly for a December interest rate hike by the Federal Reserve says Gad Levanon, Managing Director at the Conference Board
The US economy added 271000. Jobs in October and unemployment rate fell to 5%. According to the Labor Department what does today's report mean for a potential December interest rate hike. Let at got 119 managing director of economic outlook and labor market at the conference board. They get so much for joining us we appreciate you measure so take on October jobs report. It was fantastic. We were consumed us two months of relatively weak job growth. In August and September of that we may see a slowdown but a decent number of completely. Through the slowdown out of doing so it's. And generally strong jobs report today even without and the growth and manufacturing sector which was to be expected. 2072. Puts this reminds him budget around 200000. It does facing confirms that there was no slowdown in economic TV's teen USA. Which is also confirms to GDP number of home. From last week which showed the relatively strong domestic economy. So I am totally at class that wage growth which also accelerated memo. Two and half of sand. Year on year rolling average hourly earnings so far the it was starting to see evidence of acceleration in wages of those really not much to complain about. Where they're out any surprises I doubled the size the top line number of was there anything else that stuck out for you. I was in the did the wages and wages grew very rapidly in DC and months and so that it wasn't a complete surprise because. We still tightening of the labor market were expecting it to happen but it was a nice nice to finally if it. But about the August and September net upward revision. Yet there weren't not that large I think. But you know I think that there is it amounts to months from the PT so it's more important to look at you know the 36 months transcend. There we go we are doing very well. The labor participation rate now it helped steady at 62 point 4% what are the implications back. Right well you know that given that there are so many baby boomers retiring racing did that trend he's four day. Beautiful spot to should patient to to decline but today. The fact that it's not even recovering forward to working here core working age population 25 to 54 that he's gonna come something. And we'll still not sure why that is happening way build those. Relatively young people they are not to rejoining the labor market and and that there is not good for the tightening go to label market because the more they stay outdated system down complimentary to a drop. And enticing to defect adjusting outside he's tightened enable market fiasco and would lead to fast tower and wage growth. So what does all this mean for the Fed because the Fed is very closely watch teen. The labor market and investors are closely watching the Fed's so what does today's report mean for a potential rate hike for their December meeting. I think you're running in the recent days and there was a beginning golfer I would say. Tendency towards a hike in December and d.'s report. Increases the probability significantly so I think. We are much more likely to see offense hike and then. Oh but what about what that you mentioned earlier about young people. Not. Participate in the labor force what that means the potential roadblock for that bit fake you know let let's just wait until 2006 funny. I think they were actually the reason they didn't trail hike so follies is it more because of don't consumed about international developments today uncertainty about China. But facing debt calmed down a leader who also sees the stock market. Completely recovered Tuesday as some are and so do you are down not as concerned about that and I don't really think we would need to have really bad news and between now and Sam before defense not too high. Think that's cat thank you. We're really appreciate you gad is the managing director at the conference board I'm church yep Brantley this is torture.