US employment snapped back with a vengeance in October, wage growth accelerated and the jobless rate fell to 5%, boosting the odds that Federal Reserve policy makers will raise borrowing costs next month.
The 271,000 gain in payrolls was the biggest this year and exceeded all estimates in a Bloomberg survey of economists, a Labor Department report showed Friday. The median forecast called for a 185,000 advance. Average hourly earnings climbed from a year earlier by the most since July 2009, Bloomberg reported.
The report also showed diminishing labor-market slack. The number of Americans working part-time because of a weak economy fell to 5.7 million in October, the lowest since June 2008.
Payroll estimates of 75 economists in the Bloomberg survey ranged from gains of 75,000 to 250,000 after a previously reported 142,000 September advance.
Revisions to prior reports added a total of 12,000 jobs to payrolls in the previous two months. Still, employment only averaged 145,000 in August and September.
The unemployment rate, which is derived from a separate Labor Department survey of households, is the lowest since April
Employment in October was led by the biggest gain in retail payrolls since November, the strongest hiring in construction in eight months and a pickup at temporary-help agencies. There was no change at the nation’s manufacturers. The underemployment rate -- which includes part-time workers who prefer a full-time position and people who want to work but have given up looking -- fell to 9.8%, the lowest since May 2008.
American manufacturing has taken a hit with softening sales in overseas markets, a stronger dollar and oil-sector weakness depressing demand. Services, which account for about 90% of the economy, are relatively shielded and faring better.
