US job growth accelerates

US job growth increased at a fairly brisk clip in October and the unemployment rate fell to a fresh six-year low of 5.8 per cent, underscoring the economy’s resilience in the face of slowing global demand.

Despite the strengthening labour market picture, wage growth remained tepid, suggesting the Federal Reserve would be in no hurry to start lifting interest rates. Employers added 214,000 new jobs to their payrolls last month, the Labour Department said on Friday. The unemployment rate fell from 5.9 per cent, even as more people entered the labour force, a sign of strength in the jobs market.

Data for August and September were revised to show 31,000 more jobs created than previously reported. “Today’s jobs 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.

Economists polled by Reuters had forecast 231,000 new jobs last month and for the unemployment rate to hold steady.

US stock index futures edged up on the data. Prices for US Treasury bond prices fell slightly and the dollar was little changed.

Monthly job growth has exceeded 200,000 for nine straight months, the longest stretch since 1994, sufficient strength to keep the economy on a higher growth path after it expanded at a 3.5 per cent pace in the third quarter.

The Fed last month struck a fairly upbeat tune on the jobs picture as it ended its bond buying program, dropping its characterization of labour market slack as “significant” and replacing it with “gradually diminishing.”

Sturdy job gains on their own, however, will probably not be enough to convince the US central bank 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 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.

The employment report showed that average hourly earnings rose only three cents last month, leaving the year-on-year change at 2.0 per cent, the range its been in for the last few years. But other data have begun to show wage growth picking up. Details of the October employment report were fairly upbeat.

The labour force participation rate and the ranks of the long-term unemployed both improved. These metrics are on Fed Chair Janet Yellen’s so-called dashboard and are being watched for clues on the timing of the first rate hike.