Unemployment Fell to 4.1 Percent Last Month, But There's Still No Sign of Wage Growth

Applicants wait in line to enter a job fair on Aug. 2 at an Amazon fulfillment center, in Kent, Washington.
Applicants wait in line to enter a job fair on Aug. 2 at an Amazon fulfillment center, in Kent, Washington.Elaine Thompson / AP file

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By Lucy Bayly

The economy gained 261,000 jobs in October, adding back thousands of positions after hurricanes Harvey and Irma hit the labor force in September, according to the Department of Labor's monthly jobs report.

It’s not the headline number the market was expecting — some had pegged Friday's figure at 400,000 — but it nonetheless shows steady growth. The economy has added an average of 139,000 jobs in the last two months, continuing its record-breaking streak of 85 months of gains.

Unemployment levels dropped to 4.1 percent in October, the lowest rate since December 2000 — though last month's figures reflect a 765,000-strong decrease in labor force participation.

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Wages continued their enduring riddle, staying almost flat with an annual increase of just 2.4 percent. Observers are keen to see higher salaries in order to stimulate consumer spending.

Friday's data is the latest indication that the economy remains on a steady upward trajectory, and could effectively seal the deal for a quarter-point rate increase by the Federal Reserve in December. The central bank declined to make any further adjustment to the interest rate after its November meeting this week, having already spiked rates twice this year.

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"In general, the economy is moving along, though a little softer than many market participants anticipated," Citizens Bank's Tony Bedikian told CNBC.

The Labor Department also revised its figures for the month of September to show an increase of 18,000, as opposed to a loss of 33,000 jobs.