WASHINGTON — America's labor market continues to show signs of gradual strengthening, with newly released government data showing the economy added 161,000 jobs last month. Annual wage growth surged to levels not seen since before the financial crisis, while the unemployment rate dipped to 4.9 percent in October from 5 percent in September.
Economists surveyed by Bloomberg had expected U.S. employers to add 173,000 new jobs in October, roughly on pace with average monthly job gains over the course of the year.
The biggest job expansion came in professional and business services, followed by health care and financial activities.
The final piece of economic data released before the presidential election Tuesday, the jobs report showed an economy that is steadily emerging from the shadow of the Great Recession. Analysts said Democratic candidate Hillary Clinton and Republican candidate Donald Trump could seize on varying aspects of the data to make their closing arguments in the campaign.
Trump's national policy director, Stephen Miller, called the report "disastrous," saying that it underscored "the total failures of the Obama-Clinton economy that delivers only for donors and special interests and robs working families."
Miller pointed to the economy's sub-3 percent growth during President Barack Obama's term in office and the nearly 500,000 so-called discouraged workers who did not look for work in October because they believed no jobs were available to them.
In an interview, Labor Secretary Thomas Perez had a different take on the same figures, pointing out that the ranks of discouraged workers had dropped to their lowest levels since the start of the Obama administration. "That's very heartening," he said.
The labor force participation rate was 62.8 percent in October, roughly flat from 62.9 percent the previous month. The Labor Department also revised its estimates for job creation in August and September, with the combined total rising by 44,000.
The strongest sign for the economy was the substantial increase in hourly wages, which indicates that growth has helped absorb slack in the labor market, and that employers are competing more to hire and retain workers. Average hourly earnings of private sector workers rose 2.8 percent in October from a year earlier, the fastest growth since 2008.
"We're increasingly seeing evidence that the labor market is tight enough to put some upward pressure on wages and inflation generally as well," said Jim O'Sullivan, chief U.S. economist at High Frequency Economics. "The message generally from this is that the Fed probably won't want the unemployment rate to go a lot lower."
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The employment figures, which come on the heels of an unexpectedly strong gain in U.S. economic growth in the third quarter, are likely to further lift expectations for the Federal Reserve to raise interest rates at its upcoming mid-December meeting.
In a meeting Wednesday, the Fed's policymaking committee said the case for raising rates continued to strengthen, but that officials had "decided, for the time being, to wait for some further evidence of continued progress toward its objectives."
The Fed lifted its benchmark interest rate last December but has waited for further signs of an improving labor market before raising interest rates this year.