U.S. non-farm payrolls rise above expectations in October, jobless rate falls to 3.5 pct

U.S. non-farm payrolls rose above expectations in October. Employment rose 266k, as compared with consensus expectations of a rise of 180k. Also, the data for prior two months was upwardly revised by 41k jobs. The jobless rate reversed October’s rise, and came in at 3.5 percent.

The headline figure was mainly driven by GM workers returning to work. The BLS noted that within manufacturing, jobs in motor vehicle and parts rose 41k, essentially reversing the loss in October. That stimulated overall manufacturing hiring to 54k, which is still an acceleration from recent months even stripping out autos.

Hiring in private sector rose 206k, underpinned by gains in health care and professional and technical services. Jobs in leisure and hospitality continued to increase, and most services sectors saw job gains. Government employment rose modestly, although the federal government lost jobs.

The labor force participation rate dropped slightly to 63.2 percent; however, it is still up over the past year. Average hourly earnings rose 0.2 percent in the month and 3.1 percent year-on-year.

“Despite uncertainty on the trade front and softer global growth, the labor market has been remarkably resilient. With reports like this, the FOMC can sit comfortably on the sidelines after cutting rates three times this year. As long as international risks do not intensify and hurt confidence domestically, the American economy will remain in expansion, supported by a healthy consumer”, said TD Economics in a research report.