US employers added more jobs than expected in October while wages rose firmly, underscoring the resilience of the labor market despite the Federal Reserve’s aggressive efforts to cool it down.
Nonfarm payrolls increased 261,000 last month following an upwardly revised 315,000 gain in September, a Labor Department report showed Friday. The unemployment rate ticked up to 3.7% as participation edged lower, while average hourly earnings accelerated from the prior month.
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The median estimate in a Bloomberg survey of economists called for a 193,000 advance in payrolls and for the unemployment rate to edge up to 3.6%.
Job gains were relatively broad based, led by a handful of categories like health care, professional and business services and manufacturing.
The report suggests demand for workers remains robust despite rapid interest-rate hikes and a darkening economic outlook. Layoffs, while rising, are still historically low, and competition to fill millions of vacant positions has driven rapid wage gains.
While that’s helped underpin consumer spending — the engine of the economy — it’s also made the Fed’s efforts to cool inflation more difficult and suggests the central bank will maintain its resolute tightening campaign in the months ahead.
Fed officials have repeatedly emphasized that in order to meet their inflation goal, they need to bring labor supply and demand more into balance. Chair Jerome Powell, speaking after the central bank raised rates by another 75 basis points on Wednesday, said that job-market conditions haven’t softened yet in an “obvious” way.
Treasury yields rose, while S&P 500 index futures remained higher and the dollar fell slightly.