The economy added to its jobs streak today.
Nonfarm payrolls were up 214,000 in October, according to the Bureau of Labour Statistics. The unemployment rate dropped to 5.8%, the lowest it has been since the summer of 2008.
While the headline numbers are good, wage growth is still stagnant, rising only 2% year-over-year. As a result, Wall Street thinks this means the Fed won’t feel too much pressure to raise interest rates sooner than anticipated.
From a note to BNP clients: “Today’s employment report is likely to keep the FOMC on track to hike rates around Q2 2015 — with risks for earlier or later roughly balanced.”
Captial Economics’ Paul Ashworth shared the same sentiment: “Admittedly, the Fed doves could still cling to the news that, despite the decline in the unemployment rate, there is still no sign of a pick -up in average hourly earnings, which increased by a muted 0.1% m/m last month.”
NB: For the market, this report should be goldilocks. No slowdown, no pressure to tighten.
— Joseph Weisenthal (@TheStalwart) November 7, 2014
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