Anything For You All: Jobs report crushes expectations, unemployment rate plunges to 7-year low

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November 06, 2015

The October jobs report was a blowout.

Data out Friday morning showed that the US economy added 271,000 jobs in October. It was the strongest pace of employment growth this year, and nearly 100,000 jobs more than the consensus forecast for 182,000.

The unemployment rate dropped to 5%, the lowest level since 2008. Economists consider a 5% rate to indicate full employment. The labor force participation rate stayed at a 38-year low, with just 62.4% of American civilians over the age of 16 working or looking for work.

Average hourly earnings grew by 0.4% month-on-month, better than forecast.

The report had been expected to show a modest rise in the pace of jobs growth, following the unexpected slump we saw over the last two months. In Friday's report, September nonfarm payrolls were revised even lower to 137,000 from 142,000.

Earlier this week, Fed chair Janet Yellen reiterated that a rate hike next month is "a live possibility", if economic data point to a stronger labor market and rising inflation.

And so, this jobs report was closely watched as an indicator of how close the labor market is to achieving the Fed's goals.

Manufacturing employment was unchanged, beating expectations for a decline by 5,000 amid a slowdown in the sector.

Following the release, stock futures tumbled, and Dow futures lost as many as 70 points. The two-year yield, which is very sensitive to interest-rate expectations, spiked seven basis points to as high as 0.92%.

Here's what Wall Street expected, via Bloomberg: