Investing.com – The U.S monthly employment report showed that the economy created fewer jobs than expected in October, despite a strong recovery from hurricanes that hit in the prior month, according to official data released on Friday.
Non-farm payrolls (NFP) rose 261,000 in October, compared to the creation of just 18,000 posts a month earlier that was revised up from the initial decline of 33,000.
The data missed the consensus estimate for the creation of 310,000 jobs but showed the recovery in the U.S. labor from the effect of Hurricanes Harvey and Irma in September.
On a positive note, the jobless rate unexpectedly fell to 4.1%, from 4.2%
Average hourly earnings showed no change month-on-month in October, below forecasts for a gain of 0.2% and compared to the prior 0.5% increase.
On an annualized basis, wage inflation rose 2.4% in October, compared to forecasts for a 2.7% rise and the prior month’s 2.8% advance that was revised from an initial 2.9% increase.
The increase in wages is being closely monitored by the Federal Reserve for evidence of diminishing slack in the labor market and upward pressure on inflation. Economists generally consider an increase of 3.0% or more to be consistent with rising inflation.
Additionally, the private sector created fewer of the new job contracts than expected in October with a total of 252,000, compared to consensus expectations for 303,000. September’s number was revised to an increase of 15,000 private nonfarm payrolls, from the prior reading of the destruction of 40,000 jobs.
Government payrolls increased by 9,000 last month, compared to the 3,000 public jobs created in September, revised from an initial increase of 7,000 positions.
The participation rate unexpectedly fell to 62.7% in October from the prior 63.1%. Analysts had expected no change.
The U-6 unemployment rate, that includes those workers who are working part-time for purely economic reasons, fell to 7.9% from the September’s reading of 8.3%.
Furthermore, the average weekly hours held stable at 34.4 in in October, in line with expectations.
After the release, the dollar turned negative in reaction to the disappointing data. The U.S. Dollar Index traded at 94.45, compared to 94.65 ahead of the report. EUR/USD traded at 1.1668, from 1.1650 before the publication, USD/JPY traded at 113.81, from 114.06 earlier, and GBP/USD was at 1.3101, compared to 1.3094 previously.
U.S. futures still pointed to a higher open on Wall Street. The blue-chip Dow futures gained 36 points, or 0.15%, S&P 500 futures rose 2 points, or 0.07% while the Nasdaq 100 futures traded up 30 points, or 0.48%.
Elsewhere, in the commodities market, gold futures traded at $1,278.44 a troy ounce, compared to $1,275.56 ahead of the data, while crude oil traded at $54.70 a barrel from $54.80 earlier.