US employers added a surprisingly strong 166,000 new non-farm jobs in October, well ahead of forecasts in an early sign that consumer incomes may be better supported than thought heading into the fourth quarter, according to a government report today.
The Labor Department said the national unemployment rate in October was unchanged at 4.7 per cent. It revised September hiring to show that 96,000 jobs were added instead of 110,000 it reported a month ago and said 93,000 new jobs in August instead of 89,000 that it previously reported.
Financial markets responded powerfully to the positive labor market news. The dollar's value rose against other major currencies and stock futures climbed sharply, raising hope that some of yesterday's big market losses might be reversed.
Treasury debt prices fell across the board as investors bet it reduced chances for more Federal Reserve interest-rate cuts. The Fed on Wednesday lowered its key federal funds rate a quarter percentage point, saying it wanted to head off the risk of a housing-led economic downturn.
The monthly jobs report offers one of the first insights into fourth-quarter economic activity. The strong October hiring number may allay some concern that consumers will be so fearful about their jobs that they will be reluctant to spending in the crucial Thanksgiving-to-Christmas holiday season.
Economists said policy-makers should also be reassured by the jobs data.
"It was a very sturdy number in every respect, certainly giving the Fed confidence that they did the right thing," said Pierre Ellis, senior economist with Decision Economics Inc. in New York. "The main hope for the housing market has always been solidity of employment and income growth and so far that's holding."
The monthly report showed that some 190,000 jobs were created in service industries while 24,000 were lost in the goods-producing sector for a much stronger overall result than anticipated.