Jobless rate falls to 5 percent, increasing likelihood of Fed rate hike
WASHINGTON - There are fewer doubts now that the Federal Reserve will raise interest rates next month.
The policy-makers may have received all of the encouragement they needed in today's October unemployment report, which showed the jobless rate dropping to 5 percent.
Employers added a robust 271,000 jobs last month. Big gains occurred in construction, health care and retail. Healthy consumer spending is supporting strong job gains even as factory payrolls were flat and oil and gas drillers cut jobs.
And the hiring also boosted wages, by an average of nine cents an hour. Wages are now 2.5 percent higher than 12 months ago -- comfortably above inflation. The solid pay gains should fuel more consumer spending in coming months, which, in turn, could support further hiring.
Economist Carl Tannenbaum of Northern Trust says, "these are very strong numbers and likely to continue."
But some economists cautioned that the explosiveness of October's job growth was likely in part a bounce back from the tepid gains in August and September, when fears about the global economy had led some employers to hold back.