US employment growth beats expectations in October

U.S. employment increased more-than-expected in October, but the rise in the unemployment rate to 3.7 percent indicates some easing in labor market conditions that will allow the Federal Reserve (the US central bank) to shift towards raising interest rates at a lower rate starting in December. ‎

According to “Reuters”, the employment report issued by the US Department of Labor today, Friday, which is awaited by many, showed that non-farm payrolls increased by 261 thousand jobs last month. The September data was revised upwards to show that 315 thousand jobs were added instead of 263 thousand as previously reported

Economists polled by Reuters had expected an increase of 200,000 jobs. Estimates ranged between 120,000 and 300,000 jobs

The unemployment rate rose to 3.7 percent, compared to 3.5 percent in September. The average hourly wage also increased by 0.4 percent, compared to 0.3 percent in September

Wages rose 4.7 percent year-on-year in October after rising by 5 percent in September, as last year’s big increases were not factored in.

On Wednesday, the Federal Reserve raised interest rates by another 75 basis points and said its fight against inflation will require increased borrowing costs, but indicated it may approach a turning point in what has become the fastest monetary tightening in 40 years.

Employment growth remained strong even as domestic demand declined as borrowing costs rose as companies replaced workers who had left. But as recession risks mount, this practice may soon end. A survey conducted by the Institute of Supply Management on Thursday showed that some service sector companies are “postponing reassignments to vacant positions” due to uncertain economic conditions.

However, employment is still limited in the market at a rate of 1.9 jobs per unemployed person at the end of September.