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U.S. Employment Seen Raising December Rate Hike Chances

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U.S. job growth likely accelerated in October after two straight months of tepid gains, with wages also picking up in a show of domestic strength that would bolster prospects for a December interest rate hike from the Federal Reserve.

A Reuters survey forecast nonfarm payrolls increasing 180,000, well above the 139,000 jobs per month average for August and September. Should payroll gains meet expectations, it would add to robust automobile sales in painting an upbeat picture of the economy at the start of the fourth quarter.

With speeches from several Fed officials, including Chair Janet Yellen, suggesting a low bar for a December rate increase, economists say job gains above 150,000 in October and November would be sufficient for the central bank to lift benchmark overnight borrowing costs from near zero.

Minutes from the Fed’s Oct. 27-28 meeting and subsequent comments from Yellen have firmly put a rate hike on the table at the central bank’s upcoming Dec. 15-16 gathering.

Reuters

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Craig Erlam

Craig Erlam

Former Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary.

His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News.

Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
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