Unemployment Continues Steady Decline and Takes Pressure Off the Fed

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The unemployment rate ticked down to 5.8 percent, the lowest level since July 2008. In October the number of new jobs added to the economy rose 214,000, and there was a net 31,000 upward revision for the months of August and September. The number of available job openings now stands at a 13 year high. Underemployment also fell to 11.5 percent and the labor participation rate ticked up to 62.8% as more people came back into the workforce. Although wage increases are still lagging, increasing only 2 percent YOY, they should respond as the labor market tightens further. Overall, this was a solid report and a continuation of the positive underlying story regarding the household sector. More importantly for the market, this report falls right in the sweet spot. It is consistent with the Fed’s overall plan for raising rates and will not apply undue pressure to raise rates sooner than expected. Please read the lastest global perspective on the markets.

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