Jobs Report: Hiring Stays Strong But Unemployment Rate Rises; Dow Jones Gains

The October jobs report showed that hiring is still much too strong for the Fed, but the unemployment rate climbed to 3.7%.

The unemployment rate increased to 3.7% in October. Data like this won't change the Federal Reserve's plan to raise its key interest rates to near 5%. The Dow Jones Industrial Average rallied after the jobs report. This is because the blue-chip index is trying to end a four session losing streak.

The net hiring of 210,000 exceeded the forecast.

The private sector added 233,000 new jobs, compared to the expected 200,000. Government jobs increased by 28,000.

The increase in the average hourly wage was 0.4%, which is higher than expected. As expected, the annual wage growth slowed to 4.7%.

The combined job gains for August and September were revised upwards by 29,000. The average gain in jobs over the last three months has been a solid 289,000.

The unemployment rate had been expected to rise to 3.6%. The 306,000 increase in unemployment this month was due to 22,000 people leaving the labor force. This means they are no longer seeking work. Meanwhile, the number of employed dropped by 328,000.

Unexpectedly, the share of working-age population (16 and older) who are in the workforce dropped to 62.2%.

The Labor Department's monthly employer survey provides the headline figures for employment and wages. Separate household surveys provide information on labor force participation, employment status and unemployment rates.

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Early Friday, the Dow Jones rose by 1.1%. The S&P 500 rose 1.3%, and the Nasdaq Composite 1.3%.

The latest Dow Jones rally and the broader stock market are on life support after a surprisingly hawkish press conference from Fed chief Jerome Powell. The Dow Jones has dropped 2.6% in the past week. S&P 500 is down 4.6%, and Nasdaq Composite is down 6.8%.

The Dow is still 11.4% higher than its closing low of Sept. 30. The S&P is now 4% higher than its October 12 52-week low, while the Nasdaq has a mere 0.2% more.

The markets priced in 53% of the odds that a 75 basis-point rate increase would occur on December 14.

After initially spiking to 4.2%, the 10-year Treasury yield increased by 2 basis points to reach 4.14%.

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The leisure and hospitality industry added 35,000 new jobs. The number of factory jobs increased by 32,000.

The number of construction jobs increased by 1,000. Payrolls in health care and social assistance increased by 71,000. Retailers gained 7,000 seasonally-adjusted jobs while transportation and warehouse jobs increased by 8,000.

Follow Jed Graham @URL_ on Twitter for economic policy and financial market coverage.

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