In a very positive report, the economy added 165,000 new payroll jobs in October, the Bureau of Labor Statistics reported Friday — the report showed a strong labor market despite household discontent with the overall economy.
The unemployment rate fell a tenth of a percentage point to 4.1%.
Forecasters expected payroll job growth of 65,000.
The continued growth is a boost for President Donald Trump, whose approval has been weighed down by historically low consumer sentiment and voter frustration over too-high inflation.
Dan North, a senior economist with Allianz Trade Americas, told the Washington Examiner that the report showed strength in the labor market.
“It’s showing improvement, it’s certainly moving the three-month average up, and it’s consistent with a lot of other measures, particularly let’s say weekly jobless claims, continue to be really low,” North said.
Still, North noted that the public is unhappy about the state of the economy. He pointed out that, despite the stable labor market, wage growth is lagging behind inflation, lowering living standards even for those with jobs.
Voters on Tuesday gave Democrats back control of both the House and the Senate in a major rebuke to Trump and Republicans. The economy, and discontent with it, was the top issue for voters heading into the polls. Continued inflation and high gas prices were a driving factor in making voters unhappy.
Much of the recent surge in prices is a result of higher energy prices stemming from the war in Iran, which began earlier this year and sent gasoline prices much higher, dragging up overall headline inflation.
The Iran conflict is still not resolved and has been characterized by start-and-stop negotiations and sporadic military strikes. The halt of oil tankers through the Strait of Hormuz at various times has further exacerbated the energy supply shock.
The Federal Reserve has also been closely monitoring the labor market as it weighs whether to raise interest rates again this year in order to drive down inflation.
The Fed opted against a rate hike at its meeting last week, but most investors anticipate that the Fed will once again raise interest rates at its meeting in December.
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[ H/T Washington Examiner ]
