Employers added jobs at a steady clip as the jobless rate fell to a six-year low. But tepid wage growth won't push the Fed to hike rates sooner. Fred Katayama reports.
Employers added to payrolls at a steady clip despite concerns about a global economic slowdown. The U.S. economy created 214,000 jobs last month. That was down from September and lower than economists' forecasts, but the prior two months' tally was revised upwards by 31,000. And the private sector added a less-than-expected 209,000 jobs. The unemployment rate managed to fall to 5.8 percent even though more people entered the work force. That's a six-year low. Gains were recorded nearly across the board. Leisure and retail led the way as employers get ready for the busy holiday shopping season. The economy also added jobs in the higher paying manufacturing and construction sectors. But wage gains - a key stat that Fed chair Janet Yellen focuses on - continued to be minimal, with average hourly earnings rising a measly 3 cents last month. This, despite the reduction of slack in the labor market. The 2 percent year-on-year change is still below levels seen before the recession. That tepid wage growth, accompanied by low inflation, suggests the Federal Reserve won't be rushing to lift interest rates. LPL financial chief economicstrategist John Canally: (SOUNDBITE) John Canally, chief economic strategist, LPL Financial (ENGLISH) saying: "The Fed will say, we're making progress but not fast enough to get us to tighten rates early next year. If the economy continued to grow between 200,000 to 250,000, that keeps the Fed on pace to tighten in about a year." A solid report, economists say, but the key now is to get wages to rise at a faster clip to ensure a sustainable recovery.