October Jobs Report Is Best Yet This Year
STEVE INSKEEP, HOST:
The latest report on the labor market is a really good one. Employers added 271,000 jobs in October - far more than expected. So we’re going to talk through what happened with NPR's John Ydstie who's in our studios. John, good morning.
JOHN YDSTIE, BYLINE: Hi, Steve.
INSKEEP: So what drove this?
YDSTIE: Well, jobs came across the board - professional jobs in health care, in retail, in restaurants and on construction sites. And it's really good news because over the previous two months there were indications that the economy and the labor market could be weakening.
YDSTIE: There's a slowdown in China that was worrying. The stronger dollar was hurting manufacturing and exports. But through all that, consumers have been spending more, partly because they're not paying as much for gas. And that helped produce the big job numbers you saw in October.
INSKEEP: Oh, people were actually able to divert their money somewhere else. So what does that do to the other big employment number, the unemployment rate?
YDSTIE: Well, the jobless rate ticked down to 5 percent. That's the lowest level in seven and a half years. And another good sign - the so-called underemployment rate fell last month to 9.8 percent. Now, that includes people who've given up looking for work and part-time workers who want full-time jobs.
INSKEEP: OK, so, John, we've had so much coverage of the fact that even as the unemployment rate has gone down, wages have not improved. Many people are still earning less than they were years ago. What's happening with that? What do these numbers mean for that?
YDSTIE: Well, there was some good news there in this report as well. We saw a tick up in the rate of wage growth to about 2.5 percent a year. Now, that's a slight increase, but it's promising, and it should be something that helps the Federal Reserve decide whether to move and raise interest rates in December.
INSKEEP: OK, remind us of what the debate was here. The Fed was expected to raise interest rates or at least talk more seriously about it earlier this fall.
YDSTIE: Right, and I think this report increases the odds the Fed will raise rates in December. Remember, after their meeting last week, Fed officials said they wanted to see more improvement in the labor market, and this certainly qualifies. So analysts are now saying there's a good chance the Fed will finally start raising rates in December. But there's still opposition to that, and maybe the Fed will decide it doesn't want to play grinch and raise rates just before Christmas. We'll see.
INSKEEP: John, thanks, as always.
YDSTIE: You're welcome.