US adds 161,000 jobs in October; unemployment rate falls to 4.9%

A employee working on building pipe at Pioneer Pipe in Marietta, Ohio, on Oct 24, 2016. PHOTO: AFP

Washington (AFP) - The US economy added a solid 161,000 jobs in October while the unemployment rate fell to 4.9 per cent, according to Labor Department figures released Friday.

The department revised upward its jobs reports for the previous two months by a total of 44,000 positions, so that the average for the past three months was a strong 176,000 new jobs.

Average hourly earnings saw their strongest gains in seven years, rising 2.8 per cent to US$25.92.

Overall unemployment was little changed from prior months, declining a tenth of a point to return to level recorded between June and August. However, the jobless rate among Hispanics fell sharply from 6.4 per cent to 5.7 per cent.

Business services and healthcare saw strong gains, adding 43,000 and 31,000 positions respectively, with healthcare having grown by more than 400,000 positions over the previous 12 months.

Policymakers at the US Federal Reserve have so far held off raising US interest rates during 2016, hoping to avoid interrupting a fragile recovery, a position they reaffirmed this week.

However they have signaled their intention to increase rates as soon as December.

Chris Williamson, chief business economist at IHS Markit, said Friday that the new jobs data made this more likely.

Initial estimates for US growth in the third quarter showed the economy had expanded by 2.9 per cent, a sign of regained momentum, he said.

"It seems that the only remaining obstacle to the Fed hiking in December would be a significant adverse financial market reaction to the US presidential election," Mr Williamson said in a note to clients.

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