US job creation rebounded in October, but wage growth came in substantially below economists’ estimates, according to data released on Friday.
Employment rose by 261,000 jobs last month, marking the biggest monthly increase in jobs since July 2016, the Labor Department said. But it missed economists’ estimates in a Thomson Reuters poll for non-farm payrolls to grow by 310,000.
That also compared with a revised 18,000 jobs created in September, showing that the economy weathered hurricanes better than expected. The initial reading showed the US economy shed jobs for the first time since 2010. Employment in food and beverage services increased sharply, rising by 89,000 and mostly offsetting the decrease of 98,000 logged the previous month.
The unemployment rate slid further to 4.1 per cent, from 4.2 per cent previously. The labour force participation rate also decreased by 0.4 percentage point to 62.7 per cent.
Meanwhile, average hourly earnings grew at a year on year pace of 2.4 per cent, down from 2.8 per cent in the previous month. Economists had forecast growth of 2.7 per cent. Following the report, the US dollar index, which measures the currency against a basket of peers, turned negative,sliding 0.2 per cent while Treasury yields slipped.
But the report did signal that higher wages could be on the horizon. The broader U-6 underemployment rate, which measures those out of work or in part time jobs, slid further to 7.9 per cent from 8.3 per cent. James Knightley, economist at ING, pointed to this number noting it “really underlines how strong the jobs market is, meaning that the balance of risks must lie to the upside on wage growth from here”.