The solid jobs gains and the sharp increase in wages bolster the Fed's case for a December rate hike. As Fred Katayama reports, that could also support consumer spending in the holiday shopping season.
Solid job gains reported just days ahead of the Presidential election. The U.S. economy added 161,000 jobs in October, a bit fewer than expected. But the previous two months' employment gains were revised upward, and the jobless rate ticked down to 4.9 percent. One big surprise: wage growth accelerated more than expected. Average hourly earnings rose by 2.8 percent on a year-on-year basis. That's the biggest increase in seven years. That, along with the jobs gains, could bolster consumer spending as the U.S. enters the holiday shopping season. Wage growth is also closely watched by the Federal Reserve, and economists say the report makes it likely the central bank will lift interest rates in December. BMO Capital Markets interest rate strategist Aaron Kohli said, "It's a good employment report on balance.... Marginally this makes it more likely that the Fed will go in December. Of course, the big deciding factor will be whatever uncertainty there is around the election and what impact that has on the financial markets." Scoring the biggest job gains were the usual sectors: health care, professional services and financial. Manufacturing shed jobs for the fourth straight month, and mining continued to shrink amid low prices for crude oil.