Brisk Job Gains Ease Fed’s Path
U.S. employers added jobs in October at the quickest pace this year, while boosting wages at the fastest rate since 2009, providing the U.S. Federal Reserve with the clearest signal yet that the economy may be strong enough for an interest-rate increase next month. The upbeat report eased fears that market turmoil and slowing growth in China and Europe were crimping the U.S. economy. “This is the kind of employment report that even the most diehard doves on the [Fed] cannot ignore,” said Stephen Stanley, chief economist at Amherst Pierpont Securities. “Employers have had the upper hand since the crisis, and that’s starting to swing a little bit. Workers are starting to get more leverage. Firms have a lot of job openings and they’re having trouble filling them.”
In another sign of the labor market’s gathering strength, a broad measure of unemployment that includes Americans stuck in part-time jobs or too discouraged to look for work fell to 9.8% in October, the lowest level since May 2008. This was largely due to a sharp drop in the number of involuntary part-time workers. About 269,000 fewer people described themselves as working “part-time for economic reasons” in October than September. Still, despite the strong overall labor-market reading, some signs of slack linger. In October, 7.9 million workers who wanted a job couldn’t find one, a relatively elevated level six years after the expansion began.