Businesses added 175,000 jobs to the US economy in October
November 4, 2016: US employers hired more workers in October and also hiked the wages of existing workers. Businesses added 175,000 jobs to the US economy in October and 156,000 jobs in September, while the unemployment rate ticked up to 5%.
“The expected payroll gains should easily meet the Fed’s criteria of some further progress in the labour market, which leaves us with a rate hike in December,” said Harm Bandholz, chief US economist at UniCredit Research in New York.
The economy continues to grow in terms of employment as well as economic growth. This could effectively cause the Federal Reserve to hike interest rates in December, as it is felt that the economy is capable of absorbing such a move.
The Fed had voted to keep the rates unchanged for now. Though the US central bank is expected to increase borrowing costs in December, that decision will likely depend on the outcome of the presidential election on November 8. The presidential race between Democratic candidate Hillary Clinton and Republican Donald Trump has rattled financial markets.
Usually, stocks rise before an election but this time, the presidential election has managed to disrupt the usual pattern in the equity markets. US stocks are falling due to the uncertainty over the result.
The trend in employment growth has slowed as the labour market nears full employment and the economy’s recovery from the 2007-09 recession shows signs of aging.
Nevertheless, there has been an increase in average monthly earnings, which grew by 0.3% in October from its previous position of 0.2% in September.