October job gains hit 165000 raising December rate hike odds

The United States economy added 165,000 nonfarm payroll jobs in October, according to reporting by Redfin News, MPA Magazine, HousingWire, and Realtor.com Research. Data released on Friday by the Bureau of Labor Statistics shows the October figure exceeded expectations, with MPA Magazine stating that Wall Street had forecast 59,000 jobs. Prior months were also revised upward by 84,000 jobs in total, including 53,000 additional jobs in August and 31,000 in September, HousingWire reported. [1][2][4][7]

The latest figures bring the six-month moving average of job creation to 83,000, according to Redfin News. HousingWire added that October's additions significantly exceeded the 12-month average monthly gain of 48,000 jobs. MPA Magazine reported that the unemployment rate reached 4.1 percent, beating consensus estimates of 4.2 percent, while average hourly earnings rose 0.4 percent month-over-month and 3.1 percent annually. However, HousingWire noted that the U-6 underemployment rate increased to 7.9 percent. [1][2][4]

The Federal Open Market Committee controls the supply of credit to banks and the sale of treasury securities. As FTMQ Real Estate reported earlier, the central bank previously maintained the benchmark federal funds rate at a target range of 3.75 percent to 4 percent following a 10-to-2 vote, while signaling that an interest rate increase remained possible at its upcoming December meeting. [10][12]

The resilient labor data has sharply raised expectations of a central bank rate hike at the December 8 to 9 meeting, according to MPA Magazine. The publication noted that odds of a December rate hike moved close to 80 percent following the report, with analysts at the Mortgage Bankers Association and Oxford Economics also supporting a rate increase. Realtor.com Research reported that nominal wage growth of 3.1 percent continues to trail inflation. [2][5][7]