After more than a year of mostly sluggish job growth, American employers stepped up hiring in October. The pickup arrived against an unusual backdrop of low unemployment and stubbornly high prices. Forecasters had braced for a much weaker number, and the result came in well ahead of what economists had projected, the Associated Press reported.
The report also cast the late summer in a better light than earlier readings had. Payroll gains for August and September were revised up by a combined 84,000, the BLS said, with professional and business services, health care, and transportation and warehousing leading October's increases. The payroll figures stem from employer surveys, while the unemployment rate is drawn from a separate survey of households, sometimes leading to the two measures pointing in different directions.
For workers, the stronger hiring has not translated into paychecks that stretch further. Average hourly earnings were up 3.1% from a year earlier, short of the 3.7% inflation rate recorded in September, according to NPR. Energy prices jumped after the outbreak of war with Iran, and the cost of living has been climbing faster than wages for much of the year. That squeeze on household budgets has been a persistent theme in the economic debate, including in this week's midterm elections.
The mix of low joblessness and elevated inflation frames the choice now facing the Federal Reserve. Policymakers kept their benchmark rate unchanged last week after the hike in September, and investors anticipate another increase when the central bank meets in December.