US unemployment rate falls to 4.9% on solid job creation

The US economy added a solid 161,000 jobs in October while the unemployment rate fell to 4.9 per cent, according to Labor Department figures released today.

The US economy added a solid 161,000 jobs in October while the unemployment rate fell to 4.9%, according to labour department figures released on Friday.

The US economy added a solid 161,000 jobs in October while the unemployment rate fell to 4.9%, according to labour department figures released on Friday. (AFP)

In a show of steady momentum in the world’s largest economy, the department revised upward its jobs reports for the previous two months by a total of 44,000 positions, taking the average for the past three months to a strong 176,000 new jobs.

Average hourly earnings also saw their strongest gains in seven years, rising 2.8% to $25.92.

The jobs report pointed to the continued health of the US economy, according to Ian Shepherdson of Pantheon Macroeconomics, who said he expected gains in average hourly earnings to continue into 2017.

“With the labour market very tight, employers will struggle to resist,” he said in a client note.

The unemployment rate was little-changed from prior months, declining a tenth of a point to return to the level recorded between June and August. However, the jobless rate among Hispanics fell sharply from 6.4% to 5.7% .

Arriving in the final moments of the US presidential elections, the results appeared unlikely to lift the fortunes of either Democrat Hillary Clinton or Republican Donald Trump.

Business services and healthcare saw strong gains, adding 43,000 and 31,000 positions respectively, with healthcare having grown by more than 400,000 positions over the previous 12 months.

Policymakers at the US Federal Reserve have so far held off raising US interest rates during 2016, hoping to avoid interrupting a fragile recovery, a position they reaffirmed this week.

However, they have signalled their intention to increase rates as soon as December. Chris Williamson, chief business economist at IHS Markit, said today that the new jobs data made this more likely.