U.S. economy expected to add 65,000 jobs as markets await October report

Key Facts

The U.S. Bureau of Labor Statistics will release its October employment report on November 6 at 8:30 a.m. Eastern Time, with markets awaiting data that could shape their view of the economy and interest-rate outlook. A FactSet survey cited by The Associated Press forecasts that the economy added 65,000 jobs during the month, with the unemployment rate holding at 4.2%. The expected reading follows a 29,000 increase in nonfarm payrolls in September, when the unemployment rate also remained at 4.2%. The new report will be measured against a month of weak job growth as investors look for a more recent indication of the pace of hiring. The October report was scheduled for release at its usual morning time, ahead of U.S. inflation data later in the month.

September data show that payrolls increased by 29,000, compared with a forecast of 90,000 for that release, after August recorded 133,000 jobs. Revisions by the Bureau of Labor Statistics lowered the combined job total for July and August by 60,000. They changed July’s reading from a 21,000 gain to a 10,000 loss, and August’s from 162,000 to 133,000. In the same month, average hourly earnings rose 0.1% to $37.81, up 3.0% over the previous twelve months. The average workweek held at 34.4 hours. These figures provide broader context for the October report, combining weak September job growth with downward revisions to estimates for the two prior months.

In its statement following the October meeting, the Federal Reserve said economic activity was "expanding at a solid pace," job gains had been in line with growth in the labor force, and the unemployment rate had changed little. The Federal Open Market Committee kept its target range for interest rates at 3.75% to 4.00% in a decision approved by 10 votes to two. Ahead of the jobs report, Labor Department data showed initial jobless claims totaled 189,000 in the week ended October 31, down 6,000 from the previous week. The four-week average of claims was 194,750. The weekly reading came in below the 196,000 claims forecast by economists surveyed by Reuters. These figures add weekly indicators to the monitoring of labor-market conditions ahead of the October report.

In another employment indicator, ADP said the private sector added 86,000 jobs in October. On monetary-policy expectations, Reuters cited CME FedWatch as showing markets priced a 66.1% probability of an increase of at least 25 basis points at the December meeting, compared with 79.9% a week earlier. The decline in those market-implied odds coincided with anticipation of the jobs data, which markets track as they assess the economy and interest rates. Convera’s currency and macro strategist said the week’s data "were strong enough to support the narrative that the U.S. labor market remains stable." Weekly claims and private-sector data stand out in this context alongside the expected figure from the survey cited by The Associated Press.

The dollar index was little changed in trading on November 5, then rose 0.02% to 101.49, according to Reuters. EL7 data showed it closed at 101.605 that day, compared with 101.425 on November 4. In Asian trading on the morning of November 6, the 10-year U.S. Treasury yield was 4.84%, near its lowest level since September 10, Reuters reported. Markets are tracking the jobs reading alongside moves in the dollar and yields as pricing for the December decision shifts. The Federal Reserve left interest rates unchanged in October, and minutes of its meeting are due on November 18 at 2:00 p.m. Eastern Time.

The next U.S. releases include the October Consumer Price Index on November 10 at 8:30 a.m. Eastern Time. The Federal Reserve will also publish minutes on November 18 from its October 27 and 28 meeting, at 2:00 p.m. Eastern Time. At that meeting, policymakers kept the target range for interest rates at 3.75% to 4.00%. These dates follow the jobs report scheduled for November 6, adding data and minutes to markets’ monitoring of the economy and monetary policy. The jobs reading is due before those events, at 8:30 a.m. Eastern Time.