The US economy generated 248,000 jobs in September, the Labor Department said today (October 3rd). The unemployment rate dropped to 5.9 per cent, its lowest level in six years.
Job growth last month represents "a strong gain in payrolls, despite the tendency in past years at least for September to be under-reported initially," said Jim O'Sullivan, chief US economist with High Frequency Economics, in a client note published by CBS news.
“This is an extraordinary number,” Doug Cote, chief market strategist at Voya Investment Management LLC, told Bloomberg. "This allays the fears about growth and offsets what we’re seeing in Europe. There’s a consistent downward trend in unemployment. It bodes well for not only future GDP growth, but future corporate profits as well."
The strong numbers could further fuel expectations of an early interest rate hike by the Federal Reserve.
"As demand is continuing to accelerate just a bit, businesses are being compelled to hire at faster pace," Russell Price, an economist at Ameriprise Financial in Troy, Michigan, told Reuters.
However, the US Federal Reserve said last month that there was no "calendar date" for an interest rate rise and that it will only do so once a "considerable time" has passed after its stimulus programme ends in October.
"The Committee continues to anticipate, based on its assessment of these factors, that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the Committee's two per cent longer-run goal, and provided that longer-term inflation expectations remain well anchored," the Fed said.
US stocks rose after the publication of today's job report, bouncing back from a second straight weekly loss in the Standard & Poor’s 500 Index.
The S&P 500 rose 0.5 per cent to 1,956.05 at 09:32 ET in New York.
The fresh US employment data is a sign of relief for investors after stocks tumbled this week amid signs of economic weakness in Europe and geopolitical turmoil.
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