US October jobs report- Analysts' reactions

The Bureau of Labor statistics released its report on October non-farm payrolls and the unemployment rate on Friday.

Non-farm payrolls increased by 161,000 in October below the consensus of 173,000. This was offset by revisions to the previous two months adding an additional 44,000 jobs. The unemployment rate edged lower from 5% in September to 4.9% in October in line with expectations.

Chris Williamson from IHS Markit commented: "A solid employment report for October further clears the path for a December Fed rate hike. News of another decent rise in non-farm payrolls and an uptick in pay growth comes hard on the heels of business surveys showing the US economy having gained further growth momentum in October”

Capital Economics chief US Economist Paul Ashworth reiterated this sentiment saying that the pickup in wage growth will reinforce Fed December interest rate hike expectations. “With productivity stagnant over the past 12 months, hourly wage growth at this pace points to a rise in price inflation above the Fed’s 2% target,” he said.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, attributed the positive result on earnings to the shorter month. "The October wage gain was boosted by a favorable calendar effect - the month had only 20 working days, one fewer than usual, and short months tend to report stronger average hourly earnings - which will unwind in November. But the trend in wage growth is rising, and we expect further gains next year as the drag from low headline and core inflation fades and people seek bigger nominal increases, in order to maintain real wage growth. With the labor market very tight, employers will struggle to resist.”