Job growth increases as unemployment levels fall in the US
October seen the US job growth increase considerably and the unemployment rate fell to a new six-year low of 5.8%, highlighting the economy’s resilience in the face of slowing global demand.
However this did not reflect the wage growth as it remained lukewarm signifying the US Federal Reserve would be in no hurry to start lifting interest rates.
Over 214000 new jobs were created by US employers according to reports by the Labor Department.
The unemployment rate fell nearly 6% and the fall came despite more people entering the labour force, which is a strong sign in the job market.
New reports from August and September amended the stats showing over 30,000 jobs were created than had been originally reported.
US job growth has surpassed 200,000 in each of the last nine months, sufficient strength to keep the economy on a higher growth path after it expanded at a 3.5% pace in the third quarter.
The relatively strong pace of job gains also signals that the slack in the labour market is being absorbed.
The Fed last month struck a fairly upbeat tune on the jobs picture as it ended its bond buying programme, dropping its characterisation of labour market slack as “significant” and replacing it with “gradually diminishing.”
Secure job gains on their own, however, will probably not be enough to convince the Fed to start raising interest rates before the second half of 2015 given a still low level of inflation.
Wage growth is the missing piece of the US jobs recovery and without significant increases; most economists say the Fed will be in no rush to lift benchmark lending rates that it has kept near zero since December 2008.
Details of the October employment report were fairly upbeat. The labour force participation rate and the ranks of the long-term unemployed both improved.
The employment-to-population ratio increased to 59.2, the highest level since 2009.
A broad measure of joblessness that includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment fell to 11.5%, the lowest level since September 2008.
In terms of sectors and trends for employment, it was reported as following:
Private-sector employment increased by nearly 210,000, with a second month of gains in manufacturing and an increase in construction.
Retail hiring advanced by 27,100 as shops gear up for a busy shopping season.
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