WASHINGTON (Reuters) - U.S. job growth increased at a steady clip in October and the unemployment rate fell to a fresh six-year low, underscoring the economy’s resilience in the face of slowing global demand.
Despite the strengthening labor market, wage growth remained tepid, suggesting little need for the Federal Reserve to hurry to start lifting interest rates.
Employers added 214,000 new jobs to their payrolls last month, the Labor Department said on Friday. The unemployment rate fell to 5.8 percent from 5.9 percent, even as more people entered the labor force - a further sign of strength.
“The report confirms that the U.S. remains the bright spot in a global economic picture filling with clouds,” said Michael Griffin, managing director at CEB in Arlington, Virginia.
The jobless rate has dropped by 0.8 percentage point since January, and employment gains have now topped 200,000 for nine straight months, the longest stretch since 1994.
Last month’s increase was a bit smaller than economists on Wall Street had expected, but that was offset by a combined 31,000 upward revision to data for August and September.
In addition, the hiring was broad-based and most of the measures Fed Chair Janet Yellen tracks to gauge the amount of slack in the labor market improved.
The U.S. central bank last week struck a relatively upbeat tune on the jobs picture as it ended a bond-buying stimulus program, but even after the employment data, financial markets held to their view that benchmark rates would stay near zero until the second half of 2015.
“Continued progress in labor markets will likely keep the Fed on a path to normalization, but it will likely remain patient ... given modest wage and inflation pressures,” said Michael Gapen, a senior economist at Barclays in New York.
Prices for U.S. Treasury debt rose, while the dollar retreated from a 4-1/2-year high against a basket of currencies. U.S. stocks were little changed.
Average hourly earnings rose only three cents last month, leaving the year-on-year increase at 2.0 percent, the level it has been around for the last few years.
The muted wage growth partly reflects the types of jobs being created. In October, about a fifth of the new jobs were in the food services sector.
But other data have begun to show wages picking up and economists said further gains should be forthcoming.
Not only are more people working, but they are also putting in longer hours. Last month, the average workweek hit a near 6-1/2-year high.
With both payrolls and the workweek expanding, a proxy for take-home wages rose 0.6 percent, a gain that put it 4.8 percent above its year-ago level, the largest increase since March 2012.
“When viewed in combination with rising household wealth and improving consumer confidence, we expect on-going gains in consumer spending,” said Robert Hughes, senior research fellow at the American Institute for Economic Research in Great Barrington, Massachusetts.
The U.S. economy’s vigor stands in sharp relief to many other major economies around the globe. The euro zone and Japan are not far from recession, and even China is slowing.
In the United States, the labor force participation rate, or the share of working-age Americans who are employed or at least looking for a job, increased by one-tenth of percentage point to 62.8 percent after two straight months of declines.
The employment-to-population ratio touched its highest level since July 2009, while the ranks of the long-term unemployed were the smallest in nearly six years.
A broad measure of joblessness that includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment fell three-tenths of percentage point to a six-year low of 11.5 percent.
Hiring in the factory sector picked up after two sluggish months, and construction payrolls also expanded.
Retail hiring advanced by 27,100 as stores gear up for a busy holiday shopping season, while government employment increased by 5,000.
Reporting by Lucia Mutikani; Editing by Andrea Ricci