October jobs gain strengthens case for December Fed rate hike

U.S. employers added 165,000 jobs in October, and the unemployment rate fell to 4.1%, according to the Bureau of Labor Statistics figures reported by The Korea Herald and Rolling Out. The gain exceeded economists’ expectations: Rolling Out said they had forecast about 59,000 new jobs, while The Korea Herald described the result as more than twice the expected level.

The stronger report renewed attention on a possible Federal Reserve rate increase in December. TokenPost reported that interest-rate futures reflected an 80% chance of a quarter-point increase after the release, compared with roughly 75% beforehand. A separate measure cited by 247WallSt put the probability at 76.8% on Friday, up from 66.9% a week earlier. That outlet also reported a rise from 70% to 78% during Friday’s trading, a different comparison from its week-over-week figures.

The Korea Herald reported that the Fed had held its policy rate steady in October after raising it in September. It said officials would receive another jobs report and inflation data before their December meeting. San Francisco Fed President Mary Daly said in an interview that she expected policymakers would need to tighten policy further, according to the outlet.

The employment report also included revisions to earlier data. Rolling Out reported that September’s job gain was revised to 60,000 and that August and September figures were raised by a combined 84,000. The outlet said professional and business services led October’s job gains, while health care added 42,000 positions and transportation and warehousing added 25,000.

The market-based probabilities do not establish what the Fed will decide. 247WallSt noted that the central bank had not provided guidance on its December decision. The Korea Herald reported that the next employment and inflation figures would be among the information policymakers receive before deciding whether further tightening is warranted.