U.S. adds 271,000 jobs in October
U.S. hiring roared back in October after two weak months, with employers adding a robust 271,000 jobs, the most since December. The unemployment rate dipped to a fresh seven-year low of 5 percent.
The burst of hiring across a range of industries came as companies shrugged off slower overseas growth and a weak U.S manufacturing sector. Big job gains occurred in construction, health care and retail.
Healthy consumer spending is supporting strong job growth even as factory payrolls were flat last month and oil and gas drillers cut jobs.
The job gains are likely strong enough to persuade the Federal Reserve to lift short-term interest rates at its next meeting in mid-December.
Robust hiring also raised wages 9 cents to $25.20. That is 2.5 percent higher than 12 months ago, the largest year-over-year gain since July 2009.
Any gain above roughly 150,000 was expected to keep Fed policymakers on track to raise interest rates from record lows at their mid-December meeting.
Continued hiring should continue to reduce the unemployment rate over time. The economy typically needs only about 100,000 jobs a month to keep the unemployment rate from rising.
That figure has fallen in recent years as the aging population and increasing retirements by baby boomers have slowed the growth of the U.S. workforce.
More recent data suggest that global turmoil and manufacturing's rough patch haven't hurt the entire economy. Consumers, the biggest driver of the U.S. economy, are still spending at a healthy clip, supported by lower gas prices and a recovery in the stock market.
The economy grew at just a 1.5 percent annual rate in the July-September quarter. The slowdown occurred mostly because businesses cut back on their stockpiles, and exports weakened.
Still, Americans boosted their spending at a healthy 3.2 percent annual pace, down just a few tenths from the second quarter. Solid consumer demand has encouraged many services firms, which make up roughly 80 percent of the economy, to step up hiring.
A survey by the Institute for Supply Management found that companies in the health care, retail, financial and transportation and warehousing industries all added more jobs in October than in September. Overall, services firms expanded last month at the fastest pace in three months. That's in sharp contrast to the ISM's survey of manufacturing firms, which barely grew in October.
Chair Janet Yellen and other leading Fed officials have said that the economy is generally healthy and that the December meeting is a "live possibility" for a rate hike.