US job growth increased steadily in October and the unemployment rate fell to a fresh six-year low, underscoring the economy’s resilience in the face of slowing global demand.
Despite the strengthening labour market, wage growth remained tepid, suggesting little need for the Federal Reserve to hurry to start lifting interest rates.
Employers added 214,000 new jobs to their payrolls last month, the Labour Department said yesterday. The unemployment rate fell to 5.8% from 5.9%, even as more people entered the workforce — a further sign of strength.
“The report confirms that the US remains the bright spot in a global economic picture filling with clouds,” said Michael Griffin, managing director at CEB in Arlington, Virginia.
The jobless rate has dropped by 0.8 percentage points since January, and employment gains have now topped 200,000 for nine straight months, the longest stretch since 1994.
Last month’s increase was a bit smaller than economists on Wall Street had expected, but that was offset by a combined 31,000 upward revision to data for August and September.
In addition, the hiring was broad-based and most of the measures Fed chair Janet Yellen tracks to gauge the amount of slack in the labour market improved.
The Fed last week struck a relatively upbeat tune on the jobs picture as it ended a bond-buying stimulus programme, but even after the employment data, financial markets held to their view that benchmark rates would stay near zero until the second half of 2015.
Average hourly earnings rose only 3c last month, leaving the year-on-year increase at 2% at the level it has been around for the last few years.
The muted wage growth partly reflects the types of jobs being created. In October, about a fifth of the new jobs were in the food services sector.
Not only are more people working, but they are also putting in longer hours. Last month, the average workweek hit a near six-and-a-half-year high.