US payrolls beat forecast as wage gains hit 3.1%


American workers enjoyed the biggest leap in pay since 2009 as job gains topped forecasts and the unemployment rate held at a 48-year low, a boost for President Donald Trump ahead of midterm elections and reason for the Federal Reserve to keep raising interest rates.
Nonfarm payrolls rose 250,000 after a downwardly revised 118,000 gain, a Labour Department report showed. The median estimate in a Bloomberg survey called for an increase of 200,000 jobs. Average hourly earnings for private workers advanced 3.1 percent from a year earlier and the unemployment rate was unchanged from Sept-ember at 3.7 percent, both matching projections.
The figures give Republicans another economic accomplishment to tout ahead of midterm elections as they seek to defend control of Congress from what polls indicate will be Democratic gains. The continued hiring and wage increases also reflect a tax-cut boost and reinforce expectations that the central bank will raise interest rates for a fourth time this year in December, though such an outlook may further unsettle investors who just sent US stocks to their worst month since 2011.
“The labour market is cookin’, and that’s the bottom line,” said Ward McCarthy, chief financial economist at Jefferies LLC. “What’s really impressive is that the unemployment rate would’ve declined if the participation rate hadn’t risen, and that’s a good thing. You still have more people coming back to the labour market. There’s a lot to like.” US stock futures declined after the report, while the dollar trimmed losses and 10-year Treasury yields were higher. The October data may be less of an indicator of the trend than usual because
they reflect distortions from hurricanes both this year and last year. Meanwhile, the
US trade war with China poses a risk to further gains and companies may be
slowing capital investment.
The Labour Department said 198,000 people weren’t at work due to bad weather, reflecting Hurricane Mich-ael’s impact on Florida, following 299,000 in September amid Hurricane Florence. That compares with 36,000 people not at work due to weather in the year-ago period. Michael had “no discernible effect” on national employment and unemployment estimates for October, the Labour Department said.
The October jobs report provided reassurance that the economy is on sound footing, despite the dramatic seesaw in the pace of hiring gains over the past several months.

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