Investing.com – The U.S labor market showed that the economy created fewer jobs than expected in October, but the unemployment rate still dropped as forecast and wages rose more than expected, according to official data released on Friday.
Non-farm payrolls rose 161,000 in October, compared to the rise of 191,000 in September that was revised from the initial reading of 156,000. The data missed the consensus estimate for the creation of 175,000 jobs.
Nonetheless, the Federal Reserve (Fed) considers the creation of 150,000 to be a solid reading.
The jobless rate dropped down to 4.9%, from the previous 5.0%, as expected.
Average hourly earnings rose month-on-month by 0.4%, compared to the prior increase of 0.3% (revised up from an initial gain of 0.2%). Analysts had expected an increase of 0.3%.
The increase in wages is being closely monitored by the Fed for evidence of diminishing slack in the labor market and upward pressure on inflation.
Additionally, the private sector created fewer of the new job contracts than expected in October with a total of 142,000, compared to consensus expectations for 166,000. September’s number was revised up to 188,000 private nonfarm payrolls, from the prior reading of 167,000.
Government payrolls increased by 19,000 last month, compared to the creation of 3,000 public jobs that occurred in September, revised from an initial loss of 11,000 positions.
Furthermore, the average weekly hours remained unchanged at 34.4 in October. The reading matched expectations.
The participation rate edged down to 62.8% in October, from the prior reading of 62.9%
Immediately after the release, the greenback moved higher. The U.S. Dollar Index traded at 97.28, compared to 97.13 earlier. EUR/USD traded at 1.1092, from 1.1111 before the release, USD/JPY traded at 103.10, from 102.93, and GBP/USD was at 1.2486, compared to the previous 1.2497.
U.S. futures pointed to a flat to lower open on Wall Street. The blue-chip Dow futures dropped 0.09%, S&P 500 futures was slipped 0.01% and the Nasdaq 100 futures gave up 0.07%.
Elsewhere, in the commodities market, gold futures traded at $1,301.75 a troy ounce, compared to $1,302.85 ahead of the data, while crude oil traded at $44.32 a barrel from $44.30 earlier.