The U.S. economy created 214,000 jobs in October, the Labor Department reported Friday, pushing the unemployment rate to its lowest level in six years and suggesting the labor market recovery remained intact.
Although October’s nonfarm payroll data fell short of Wall Street’s estimates, which had expected jobs growth at 231,000, the prior two months were revised upward by a net 31,000 jobs. The report coincided with the Federal Reserve’s decision to end its massive bond-buying to stimulate the economy, with the Fed expressing broad confidence in the economy’s health.
Stock prices turned lower after the report was issued.
The closely watched unemployment rate dipped to 5.8 percent in the month, its lowest since 2008. However, the labor force participation rate—considered by some economists to be a more reliable barometer of labor conditions—rose only modestly to 62.8 from 62.7 percent. That indicator remains mostly flat since April, the Labor Department said, and remains mired at its lowest level in nearly four decades.
Indeed, the payrolls data appeared likely to sharpen the differences between two competing camps: those who believe job creation is consistent with a robust recovery, and those who believe millions are still being left behind.
Tuesday’s midterm elections, which saw Republicans recapture a majority in the U.S. Senate and make unexpected gains at the state and local level, underscored deep voter dissatisfaction with the economy.
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The employment report highlighted 2.2 million “marginally attached” workers, people not in the labor force who want work, yet are not counted as unemployed because they haven’t actively sought employment. Among that number, 770,000 were counted as “discouraged” workers who don’t believe there are jobs available for them.
In an interview with CNBC, Cleveland Fed President Loretta Mester hailed the report, calling the payrolls growth “solid” and indicating the central bank stood ready to begin raising interest rates next year.
Among the largest gains last month were in food and beverages, which added 42,000 positions, and retail, which added 27,000 jobs. Professional services employment jumped by 37,000. Analysts, however, saw some problems in the data—namely depressed wages and millions of job seekers still considered discouraged.
Meanwhile, many of the jobs created during the month were skewed toward lower-paying, less skilled jobs, experts said.
“Although the headline number is decent, the details behind the curtain will be particularly concerning to investors and Main Street,” said Todd Schoenberger, managing partner of LandColt Capital. “Wage growth is embarrassingly low, especially considering where we are in terms of the so-called economic recovery.”
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Average hourly earnings for October rose marginally, by 3 cents to $24.57, the Labor Department reported. Over the year, average hourly earnings are up only 2.0 percent, at a time when utility costs in some regions are on the rise and food prices are surging.