Announced this morning, the economy added 261,000 jobs in October, higher than expected. The Health Care and Social Assistance industry was again relatively strong, while the Construction industry was weak. The Unemployment Rate ticked two tenths higher to 3.7% and the Labor Force Participation Rate at 62.2% is one tenth lower than the previous month. Average Hourly Earnings increased 0.4% in October, slightly more than expected, and is 4.7% higher on an annual basis. Average Weekly Hours were 34.5, the same as last month.
Overall, the labor market remains remarkably stable with a higher increase than expected in the headline jobs number coupled with a low unemployment rate, although it did move two tenths higher in October. Furthermore, weekly initial jobless claims remain in the low 200k range, highlighting the strength in the labor market in early November. Wages are still increasing, and the annual rate of average hourly earnings remains above historical levels. The Federal Reserve is even more vigilant on tightening policy to combat inflation, as noted in their commentary following the announcement of their 75-basis point rate increase earlier this week, a stance which is substantiated by these employment figures. Until inflation wanes, this policy is likely to persist in the coming months; a policy stance which markets continue to digest even as we head into mid-term elections next week.
Following the release of the jobs report, U.S. 10-year treasury yield ticks higher and equity futures are also higher as we head into the market open.
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