US jobs market shows unexpected strength after further rates rise from the Fed
- The U.S. economy added more jobs than expected in October
- U.S. payrolls grew by 261,000
- The jobs report comes a day after the Fed announced a further rate hike
- Unemployment rate rises to 3.7% – close to a 50-year low
Ziad Gergi, Senior Fund Manager, Hargreaves Lansdown:
“Today’s job report in the US for the month of October came higher than expected with the nonfarm payroll at 261K well above the 195K expected. In addition, the September number have been revised upward from 263K to 315K bringing the unemployment rate to 3.7%.
The initial reading is indicating that the US economy has been quite resilient in the face of the multiple rate hikes by the Fed. In addition, the interesting reading was on the average hourly earnings that came slightly above expectation at +0.4% (versus 0.3%) indicating a continued wage inflation.
Initial market reaction: stocks mixed (initially down then up), rates up and dollar strength indicating that the market is expecting the Fed to continue in their rate hikes. This is in line with the message from Jerome Powell this week. While the Fed is expecting the pace of the rate hike to slowdown (+0.5% expected for December meeting), members of the FOMC are expecting the end rate to be higher than what the market is currently pricing.”
