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US Unemployment Rate Falls

James Boston
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US Unemployment Rate Falls

The strength in the US labour markets has come through again today in the form of an improving rate of Unemployment and a moderate increase in hourly earnings. The official Unemployment Rate for the month of October delivered a positive surprise to markets when it was announced as having unexpectedly fallen a point from 5.9% to 5.8%, the anticipation was that the rate would once again hold at the 5.9% level.

Despite the good news in the overall unemployment rate the key Non Farm Payroll numbers have moderate in their rate of increase according to the latest numbers also released this afternoon. The expected increase of 231k failed to materialise and the Non Farms could only post a gain of 214k, this is still a relatively health level but it does represent a drop from the September number of 248k. The Private Non Farm Payroll figure also missed it’s target in October, the latest reading is 209k which is a drop on the September number of 236k and compares to an anticipated figure of around 220k. Manufacturing Payrolls however came in better than expected at 15.0k compared to the previous month’s gain of just 4.0k and easily beat the expected number of 10k. Government Payrolls did not fare so well, these fell to 5.0k in October from 12.0k in September and missed the consensus estimate for a rise to 15k.

The falling unemployment rate becomes even more meaningful in the context of rising wages, the implication being a tightening up of slack in the labour markets. The latest Average Hourly Earnings figure has been announced as having posted a gain of 0.1%, this is an improvement on the previous reading which recorded 0.0% growth, the expectation however was missed on this occasion as market analysts had predicted an October rise of 0.2%.

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