The overall unemployment level remained at 3.7 percent, the lowest since 1969, while Black and Asian unemployment inched down to 6.2 percent and 3.2 percent respectively.
“These are incredible numbers,” President Donald Trump commented in a Nov. 2 morning tweet. “Keep it going, Vote Republican!”
Wow! The U.S. added 250,000 Jobs in October – and this was despite the hurricanes. Unemployment at 3.7%. Wages UP! These are incredible numbers. Keep it going, Vote Republican!
— Donald J. Trump (@realDonaldTrump) November 2, 2018
Kevin Hassett, head of White House’s Council of Economic Advisers, said Trump is right to point to the strength in the economy.
“It’s just a great human story,” he said during a Nov. 2 call with reporters. “The fact is that there’s 1.3 million people who were so discouraged that they weren’t in the labor force that are back in and most of them have a job now.”
The unemployment rate doesn’t count workers who haven’t sought a job in the past four weeks. The rate slightly decreased to 7.4 percent in October when counting people who sought a job in the past year and also those with part-time jobs in want of a full-time one.
The economy needs to expand by about 120,000 jobs a month to keep up with new workers coming in. The strong job growth defied the mid-October devastating hit of Hurricane Michael in Florida and expectations of economists, who predicted 190,000 more jobs.
“The report shows a booming U.S. economy with a sufficient whiff of wage inflation to keep the Fed on track to raise rates in December and at least twice next year,” said David Kelly, chief global strategist at JPMorgan Funds in New York.
Average hourly pay hiked 3.1 percent from a year ago in private non-farm jobs.
Firming wages support views that inflation will hover around the Fed’s 2.0 percent target for a while. The personal consumption expenditures price index—excluding the volatile food and energy components, which is the Fed’s preferred inflation measure—has increased by 2.0 percent for five straight months.
Hassett pointed out that “all the surveys about capital spending plans are through the roof.” That suggests, he said, that the wage increases are not just a product of a tightening job market, which would have boosted inflation, but are based on a solid footing of increasing productivity.
The Fed is not expected to raise rates at its policy meeting next week, but economists believe October’s strong labor market data could see the U.S. central bank signal an increase in December. The Fed raised borrowing costs in September for the third time this year.
Trump has criticized the Fed for raising the rates too fast. Aggressive rate hikes have historically preceded economic depressions. Since major banks that hold decision power in the Fed have mostly escaped the most devastating consequences of the depressions, some experts believe the Fed’s more drastic interventions are the underlying cause of the boom and bust cycles, allowing the big players to act with a certain foreknowledge of economic developments.
Hasset said Trump respects the independence of the Fed. Trump picked Jerome Powell to lead the Fed a year ago today but said he doesn’t talk to him directly to preserve his independence. Still, Trump said he’s not satisfied with Powell and would like him to keep the rates low.
“I’m not happy with what he’s doing at all,” Trump said on Oct 17. “I would like to have interest rates low and I’d like to pay off debt. But you can’t pay off debt when he keeps raising the rates.”
Reuters contributed to this report.