US Adds 165,000 Jobs in October, Far Exceeding Expectations; Fed Hike Odds Jump
US October nonfarm payrolls rose by 165,000, beating expectations, while the unemployment rate fell to 4.1%, significantly increasing the probability of a Federal Reserve rate hike in December.
The Bureau of Labor Statistics reported that the US economy added 165,000 jobs in October, far exceeding economists' expectations, while the unemployment rate ticked down to 4.1%. The agency also revised August and September figures upwards, indicating that the economy is hotter than previously anticipated.
This resilience adds to evidence that the US Federal Reserve will hike interest rates at its December meeting. According to the CME FedWatch tool, odds of a rate hike jumped 12 percentage points following the release. Markets interpret this as the central bank focusing on tackling elevated inflation stemming from the Iran war.
However, some traders questioned whether the Fed would have the appetite to raise rates following Thursday’s $2.5 trillion tech selloff, sparked by fears that Democratic gains in the US midterms could slow the AI buildout. “Will the Fed want to raise interest rates in the face of a market which is teetering?” an equity trader asked.