U.S. employers hired at a strong pace in October, and revisions showed the labor market weathered hurricane damage better than previously estimated.
Nonfarm payrolls rose a seasonally adjusted 261,000 in October, a pickup from the prior month, the Labor Department said Friday.
The unemployment rate ticked down to 4.1%, its lowest level since December 2000.
Economists surveyed by The Wall Street Journal had expected 315,000 new jobs and a 4.2% unemployment rate last month.
Wages failed to break out, rising 2.4% from a year earlier, a slowdown from last month.
September’s payrolls data, initially reported as the first drop in seven years, were revised to show employers actually created 18,000 new jobs that month, extending the economy’s streak of job gains to a record 85 straight months.
When combined with August and September’s job growth, estimates of which were revised up, data show the economy added jobs over the last three months at a pace of 162,000 a month.
Average hourly earnings for private-sector workers decreased by one cent or 0.04% last month to $26.53 an hour. That fell short of economists’ expectations for a 0.2% monthly gain.
The picture was distorted for a second straight month by the impact of Hurricane Harvey, which hit Texas in late August, and Irma, which hit Florida in early September.
Service-sector employment, which took a major hit last month due to the hurricanes, contributed to the lion’s share of October’s jobs growth. The leisure and hospitality sector added 106,000 jobs after losing 102,000 in September.
The share of Americans participating in the labor force fell by 0.4 percentage point to 62.7% in October, the lowest reading since May.
October’s report comes two days after the Federal Reserve held short-term interest rates steady at its last policy meeting, but suggested it remained on course to lift them before year’s end given the economy’s “solid” growth rate.
Friday’s payrolls data suggest the labor market remains on a solid trajectory, despite September’s blip.
The strength of the labor market plays an important role in the Fed’s decision making, alongside inflation and economic growth, and Fed officials will likely view the latest jobs report as strong in terms of hiring, even if wage growth was disappointing. A tighter labor market should lead to better paychecks and ultimately stoke consumer inflation.
The central bank cited ongoing strength in the labor market when it last raised rates in June, to the current range between 1% and 1.25%. Officials have penciled in one more move for 2017 if the economy stays on track, and the Fed has one more meeting scheduled before the end of the year, on Dec. 12-13. Policy makers will see one further payrolls report, for November, before that meeting.
In October, 6.52 million workers who wanted a job couldn’t find one. And a broad measure of unemployment that includes Americans stuck in part-time jobs or too discouraged to look for work fell to 7.9%, matching its lowest level since 2006.
Source: Dow Jones