U.S. hiring roared back in October after two disappointing months as employers added 271,000 jobs, the most since December. The unemployment rate fell to a fresh seven-year low of 5 percent, making it more likely the Federal Reserve will hike interest rates in December.
Companies shrugged off slower overseas growth and a weak U.S manufacturing sector to add jobs across a range of industries. Big gains occurred in construction, health care and retail. Healthy consumer spending is supporting strong job gains even as factory payrolls were flat and oil and gas drillers cut jobs.
Payroll data for August and September also were revised upward to show 12,000 more jobs created than previously reported.
The gains are likely strong enough for the Federal Reserve to lift short-term interest rates at the next meeting of its Federal Open Market Committee on Dec. 15-16. The 5.0 percent unemployment rate is now at a level many Fed officials see as consistent with full employment.
"It's obviously a pretty strong number and I think that it probably certainly has the Fed thinking that it might be time to raise interest rates," said Kurt Brunner, portfolio manager with the Swarthmore Group in Philadelphia. "... Manufacturing’s a bit flat and mining’s not great, but there’s wage growth and I think it indicates that the economic growth in the U.S., while not fantastic, is steady and we’ll build on this."
Robust hiring also pushed up wages 9 cents to $25.20. That is 2.5 percent higher than 12 months ago, the largest annual gain since July 2009.