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| On his way out, he will leave unemployment rate at the lowest. |
President Barack Obama's final two months are here. The first African American president leaves the White House on January 20th, 2017. On his way out, he may leave his predecessor with the lowest unemployment rate in American history.
The job numbers for October are out. It nets 161,000 jobs, 73-months of job growth. It's amazing.
Nonfarm payrolls increased by 161,000 jobs last month, the Labor Department said on Friday. August and September data was revised to show 44,000 more jobs created than previously reported.
The unemployment rate fell one-tenth of a percentage point to 4.9 percent, in part as people dropped out the labor force.
The closely watched employment report was published four days before the Nov. 8 presidential election. It came on the heels of data last week showing an acceleration in economic growth in the third quarter. But economists see little impact from the report on an increasingly bitter and divisive campaign.
“There is so much noise out there right now, everyone is screaming from the rooftops. I just don’t know that any particular data point is going to have a great bearing on the election, in and of itself,” said Sam Bullard, senior economist at Wells Fargo Securities in Charlotte, North Carolina.
Though the U.S. central bank is expected to increase borrowing costs next month, that decision will likely depend on the outcome of Tuesday’s election. The tight race between Democratic candidate Hillary Clinton and her Republican rival Donald Trump has rattled financial markets.
Economists polled by Reuters had forecast payrolls increasing by 175,000 jobs last month and the unemployment rate falling one-tenth of a percentage point to 4.9 percent.
The Fed on Wednesday left interest rates unchanged but said its monetary policy-setting committee “judges that the case for an increase in the federal funds rate has continued to strengthen.” It lifted its benchmark overnight interest rate last December for the first time in nearly a decade.
“The election could still derail the Fed’s plans, particularly if a very close result led to one or both candidates contesting it via the courts,” said Paul Ashworth, chief economist at Capital Economics in Toronto.
TREND HAS SLOWED
The trend in employment growth has slowed as the labor market nears full employment and the economy’s recovery from the 2007-09 recession shows signs of aging.
Employment growth so far this year has averaged 181,000 jobs per month, down from an average gain of 229,000 per month in 2015. Still, the monthly job gains are more than enough to absorb new entrants into the labor market.
Fed Chair Janet Yellen has said the economy needs to create just under 100,000 jobs a month to keep up with growth in the work-age population.
The prospects of an interest rate hike next month were also bolstered by a solid rise in wages. Average hourly earnings increased 10 cents or 0.4 percent in October after advancing 0.3 percent in September.
The lift from a calendar quirk pushed the year-on-year increase to 2.8 percent, the biggest gain since June 2009, from 2.6 percent in September. The Fed on Wednesday struck a fairly upbeat note on inflation, saying price pressures had “increased somewhat since earlier this year.”
Despite the labor market nearing full employment, wage growth has been moderate. Economists blame this on a low labor force participation rate.
The participation rate, or the share of working-age Americans who are employed or at least looking for a job, fell 0.1 percentage point to 62.8 percent last month, not too far from multi-decade lows, in part reflecting demographic changes.
The solid payrolls gain accompanied by the surge in wages could support consumer spending heading into the holiday season, and in turn keep the economy on a relatively higher growth path.
While the household survey showed a increase in the number of people saying they could not get to work because of bad weather, the department said it was difficult to assess the impact of Hurricane Matthew on job growth last month. The storm lashed the east coast of the country last month, causing extensive flooding. The average workweek held steady at 34.4 hours.
Manufacturing employment fell 9,000 last month, falling for a third straight month. Construction payrolls increased 11,000, rising for a second straight month.
Retail sector employment surprising fell 1,100 jobs, despite expectations of a jump in early holiday season hiring.
Professional and business services payrolls rose 43,000.
Temporary-help jobs, a harbinger for future hiring, increased 6,400. Government employment rose by 19,000 jobs.
