The US economy beat estimates to add 531,000 jobs in October. Economist consensus estimates were for there to be 450,000 jobs added. The US created 194,000 jobs in September.
A strong US #jobs report including
— Mohamed A. El-Erian (@elerianm) November 5, 2021
A nice beat on consensus expectation job creation (531,000);
Favorable revisions;
Bigger-than-expected drop in the unemployment rate (4.6% ); and
4.9% annual increase in hourly earnings
Notable disappointment:
Stagnant labor force participation.
US equity futures gained following the release and the FTSE 100 consolidated gains above 7,300, closing in on the highest levels for London’s leading index since the beginning of the pandemic.
“The US jobs report got the party started again, coming in much more upbeat than expected. Employers added 531,000 new jobs to payrolls in October, higher than the 450,000 forecast,” said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.
Positive revisions to prior Non-farm Payroll figures provided investors with confidence the US recovery was robust and previous numbers hadn’t been a mere blip.
An increase in average hourly earnings demonstrated American workers were now taking more home, reducing fears that inflation would erode US household spending power.
Seven straight monthly gains in average hourly earnings … save for this past March, we haven’t seen monthly decline since June 2020 pic.twitter.com/6Hz2b4vDZa
— Liz Ann Sonders (@LizAnnSonders) November 5, 2021
After disappointing downtick in September, prime-age labor force participation rate moved up to 81.7% in October pic.twitter.com/AvsLCpgKyi
— Liz Ann Sonders (@LizAnnSonders) November 5, 2021
The strong jobs number highlights the strength of the US economy and supports the Federal Reserves recent decision to begin tapering the pace of their asset purchases.
Any reservations that the Fed moved to early will be dispelled by this reading and the drop in the unemployment rate will please policy makers keen to see the US move towards maximum employment.
“There is still ground to cover to reach maximum employment both in terms of employment and in terms of participation,” said Federal Reserve Chair Jerome Powell this week.