By Lucia Mutikani
WASHINGTON (Reuters) – Employment in the United States rose more-than-expected in October, but a rise in the unemployment rate to 3.7 percent indicates some easing in labor market conditions that will allow the Federal Reserve to move towards a rate hike to start in December. .
The long-awaited US Department of Labor employment report on Friday showed non-farm payrolls increased by 261,000 jobs last month. The September data was revised up to show that 315,000 jobs were added instead of the 263,000 as previously reported.
Economists interviewed by Reuters expected an increase of 200,000 jobs. Estimates ranged from 120,000 to 300,000 jobs.
The unemployment rate rose to 3.7 percent from 3.5 percent in September. Average hourly wages also increased by 0.4%, from 0.3% in September.
Wages rose 4.7% year-on-year in October after rising 5% in September as last year’s large increases were not taken into account.
The Federal Reserve on Wednesday raised interest rates by another 75 basis points and said its fight against inflation will require higher financing costs, but signaled it could be nearing a tipping point in what has become the fastest tightening of monetary policy in 40 years.
Employment growth remained strong even as domestic demand declined due to rising borrowing costs as companies replaced workers who had left. But as the risks of recession increase, this practice may soon end. A survey conducted Thursday by the Institute for Supply Management showed that some companies in the service sector are “putting off reassignments to vacant positions” due to uncertain economic conditions.
However, employment remains limited in the market at a rate of 1.9 jobs per unemployed person at the end of September.
(Prepared by Noha Zakaria for the Arabic Newsletter – Edited by Salma Najm)
