The American economy added 271,000 jobs in October, a very strong showing that makes an interest-rate increase by the Federal Reserve much more likely when policy makers meet next month.
The report on hiring and unemployment, released Friday by the Labor Department, was eagerly anticipated on Wall Street, where traders and economists have been sifting each new bit of economic data for any augury of the central bank’s course.
The unemployment rate dipped to 5.0 percent, from 5.1 in September.
At this level, the unemployment rate is close to what would normally be considered the threshold for full employment by the Fed and many private economists.
However, the so-called slack that built up in the labor market after the recession has altered traditional calculations of how far unemployment can fall before the job market tightens and the risk of inflation rises.
This week, Janet L. Yellen, the chairwoman of the Fed, told a panel on Capitol Hill that an increase in December was a “live possibility” if the economy continued to perform well.
Still, Ms. Yellen left herself and the rest of the Open Market Committee of the Fed plenty of wiggle room, emphasizing that no decision had been made on whether to raise rates for the first time in nearly a decade. Indeed, they will have an additional jobs report for November in hand by the time they gather for their last meeting of the year, on Dec. 15 and 16.
Although the initial interest rate increase would be small, most likely a quarter of a percentage point, with rates’ having sat near zero since the depths of the recession in late 2008, any increase would represent a new era for investors and borrowers here and abroad.
Before the report on Friday, economists had been anticipating a payroll increase of about 180,000 jobs, with the unemployment rate remaining unchanged from September’s level.
But an unusual amount of uncertainty surrounded the October report, said Ian Shepherdson, chief economist at Pantheon Economics, in a note to clients on Thursday.
After strong gains of well over 200,000 jobs each in May, June and July, the pace of job creation slackened considerably in August and September, falling well below 150,000 and far short of what Wall Street had expected.
“We don’t know why payroll growth has reportedly slowed in the past couple of months,” Mr. Shepherdson said.
Although a small proportion of total employment, manufacturing has been one source of weakness, losing more than 25,000 jobs over the summer amid softening demand from Asia and other export markets. The mining and logging sector has also been shedding jobs, cutting more than 100,000 positions this year as prices of oil, iron and other commodities have plunged.
Still, many other areas of the economy — like professional and business services, health care, and leisure and hospitality — have been very strong, with employment in each of those three sectors increasing by more than 30,000 jobs in September.
White-collar employers like Ernst & Young, the accounting and consulting giant, have been on something of a hiring binge. Over the course of the company’s 2016 fiscal year, which began in July, Ernst & Young plans to hire just over 17,000 new employees in the United States, with roughly 10,000 joining straight out of college.
In July, August, and September, the firm added 2,500 more experienced accountants and consultants, said Dan Black, director of recruiting for the Americas.
“Whether it’s dealing with taxes, regulations or technology, our clients want help,” Mr. Black said.
Nearly all the positions, whether entry-level or for more experienced workers, require at least a bachelor’s degree, underscoring how crucial credentials and specialized skills have become in today’s job market.
Starting salaries for holders of newly minted degrees in fields like accounting, finance and computer sciences frequently range above $50,000 or $60,000, Mr. Black said. Veteran workers in hot fields like cloud computing and cybersecurity can command much more.
“For experienced talent, it’s a dogfight,” he said. “In 2008 and 2009, as companies cut back, we had our pick of the litter. Now it’s much more competitive.”
The New York Times
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