WASHINGTON: Employment continued to gain at a steady pace in the United States in October and wage gains accelerated, signs that the labour market and economy made steady progress at the start of the fourth quarter.
Payrolls climbed by 161,000 following a gain of 191,000 in September that was larger than previously estimated, a Labor Department report showed on Friday. The median forecast in a Bloomberg survey called for 173,000 new jobs.
The unemployment rate fell to 4.9%, while wages rose from a year earlier by the most since 2009.
The figures are likely to keep the Federal Reserve on track to raise inyterest rates next month for the first time in 2016. Underlying the steady gains in employment is a balance between hiring managers’ need to keep up with stable domestic demand and the struggle to match more limited labour to skilled-job vacancies.
“As it continues to tighten up, firms are going to have to resort more and more to more attractive pay to draw people in,” said Stephen Stanley, chief economist at Amherst Pierpont Securities in New York. “We’re pretty close to full employment.”
Workers have been in short supply for 13 straight months, according to the Institute for Supply Management survey of service-industry companies, which make up almost 90% of the US economy.
While economists and policymakers largely agree that the US economy is close to full employment, blemishes remain, with the ranks of part-time workers and long-term jobless still higher than before the last recession.
The labour force participation rate, which indicates the share of working-age people who are employed or looking for work, slipped to 62.8% from 62.9%, as the number of people in the labour force declined.
The government’s underemployment rate dropped to 9.5% in October from 9.7%, while the number of people working part-time for economic reasons was little changed, according to Friday’s report. Some 5.89 million American employees were in part-time jobs but wanted full-time work.
Wage gains picked up, with average hourly earnings rising
0.4% from a month earlier to $25.92. The year-on-year increase was 2.8%, compared with 2.7% in the year ended in September.
The average work week for all workers was unchanged at 34.4 hours in October.
Among service providers, education and health services led with an increase of 52,000 jobs, followed by professional and business services at 43,000. Retailers pared payrolls by 1,100.
Factories reduced payrolls by 9,000 after a decline of 8,000 the month before, in line with a report earlier this week that showed manufacturing barely expanded in October while orders moderated. Employment at construction companies rose by 11,000. Governments added 19,000 workers.