US job growth surged in October after two straight months of tepid gains, with the unemployment rate hitting a seven-and-a-half-year low of 5.0 per cent in a show of domestic strength that makes it more likely the Federal Reserve will hike rates in December.
Non-farm payrolls increased 271,000 last month, the largest rise since December 2014, the Labor Department said yesterday. In addition, average hourly earnings rose 9 cents.
The solid employment and wage gains added to robust automobile sales in painting an upbeat picture of the economy at the start of the fourth quarter.
The unemployment rate fell one-tenth of a percentage point to the lowest level since April 2008. The jobless rate is now at a level many Fed officials see as consistent with full employment.
Payrolls data for August and September were revised to show 12,000 more jobs created than previously reported.
Prices for US Treasuries fell sharply and US stock index futures edged lower after the data. The dollar rose to a six-and-a-half-month high against a basket of currencies. Futures were implying a 72 per cent chance of a Fed rate hike next month.
Economists say monthly job gains above 150,000 in October and November would be sufficient for the central bank to lift benchmark overnight borrowing costs from near zero.