October job creation surged to 271,000, crushing expectations of 190,00 and even top-end forecasts for 240,000, the Bureau of Labor Statistics said.
This is positive news after last month’s weak jobs report, which came in below expectations.
Both August and September total nonfarm payroll employment levels were revised, with August changing from 136,000 to 153,000, and September changing from 142,000 to 137,000.
Average hourly earnings for all employees on private nonfarm payrolls rose by 9 cents to $25.20, following little change in September.
Labor participation stayed unchanged at 62.4 percent in October, following a decline of 0.2 percentage point in September.
National Association of Federal Credit Unions Chief Economist Curt Long said, was positive on the news saying, “As disappointing as last month’s jobs report was, this one more than makes up for it.”
“Job gains surged past analysts’ expectations, while the unemployment rate dropped even as 300,000 workers joined the labor force. Meanwhile, year-over-year wage growth hit its highest mark since mid-2009. Barring catastrophe, everything looks set for the Fed to raise rates in December,” he continued.
Doug Duncan, chief economist with Fannie Mae, similarly welcomed Friday’s report saying, “It’s hard to find flaws in today’s October jobs report. Nonfarm payrolls posted the biggest increase this year, with upward revisions bringing the average gain over the last three months to 187,000, erasing concerns over the initial report of a sharply slowing trend in recent months.”
Duncan also added that Friday’s report serves to fuel market expectations that a hike this year is very likely.
A rate hike in December became a likely possibility when Fed Chair Janet Yellen formalized the possibility of a rate hike in December, telling the House Financial Services Committee that December’s meeting is a “live possibility” for a rate increase.
“We see the jobs report as a positive for housing for several reasons, including the reported biggest gain in construction payrolls since February 2015 and rosier wage prospects. Our expectation of a gradual pace of Fed moves in the coming months does not suggest a dramatic change in mortgage rates in 2016, and the housing market should continue to improve with a stronger overall economy,” said Duncan.
