October jobs report lifts expectations for a December Fed rate hike

U.S. employers added 165,000 jobs in October, more than twice the number economists had expected, and the unemployment rate fell to 4.1%, The Korea Herald reported, citing the Bureau of Labor Statistics. The figures strengthened the case for another Federal Reserve rate increase, the outlet said, after policymakers left rates unchanged last month.

Market expectations shifted after the report. TokenPost said interest-rate futures implied about an 80% chance of a quarter-point increase at the Fed’s December meeting, compared with roughly 75% beforehand. Separately, 247WallSt reported that CME FedWatch put the probability at 76.8% on Friday, up from 66.9% a week earlier. The outlet noted that these figures reflect futures pricing and that the Fed had not provided guidance on a December move.

The report showed gains across several industries. Professional and business services and health care were among the sectors with the largest increases, TokenPost reported. Rolling Out said health care added 42,000 jobs and transportation and warehousing added 25,000, while September’s payroll gain was revised to 60,000. It also reported that revisions increased the combined August and September totals by 84,000.

Federal Reserve officials still have more data to consider before their next meeting. The Korea Herald reported that Chair Kevin Warsh said policymakers would assess the accumulation of data in deciding whether further tightening was needed. The outlet also quoted San Francisco Fed President Mary Daly saying she expected policy would need to tighten further, citing inflation pressures and the strength of the labor market.

TokenPost reported that the Fed raised rates in September and held them steady in October. Before the December meeting, officials are due to receive another jobs report and a full set of inflation data, the outlet said. While the October figures have raised market expectations for a hike, the available futures measures differ and do not establish what policymakers will decide.