The country’s total nonfarm payroll employment grew by 161,000 last month, according to the Bureau of Labor Statistics. October also saw the biggest annual wage gain since 2009. According to a HousingWire
report, Fannie Maw Chief Economist Doug Duncan said the report removed any serious impediment to the Federal Open Market Committee raising rates at its December meeting.
“We believe that today’s firm jobs report seals the deal for a rate increase in December,” Duncan said Friday. “The ammunition for a rate hike includes a solid job gain in October, meaningful upward revisions for the prior two months, and the biggest annual wage gain since June 2009.”
The report did contain what Duncan called a “slight blemish” – the seasonally adjusted labor participation rate fell from 62.9% in September to 62.8% in October, according to HousingWire.
“However, the drop in the broadest measure of labor underutilization – the U6 – to more than an eight-year low should overcome any concern that significant labor market slack remains,” Duncan said.
Duncan admitted that it’s not an absolute certainty that the FOMC will raise rates in December, HousingWire reported. However, the current economic data doesn’t give the committee much of an excuse for more delay.
“As always, a few things can throw a monkey wrench into the Fed’s plan, but the bar for inaction this year is now extremely high,” he said.
Friday’s encouraging jobs report has basically guaranteed a December rate hike, Fannie Mae’s chief economist said.