Mohamed El-Erian: October's 'Comprehensively Strong' Jobs Report Supports A December Rate Hike
- US October jobs data were better than expected when it was reported on Friday.
- The unemployment rate, private payrolls, and nonfarm payrolls data all improved month-over-month.
- Mohammed El-Erian, Allianz's Chief Economist, told Benzinga that the "comprehensively strong" report suggests the Fed will increase its rates in December.
The U.S. government released its monthly jobs report on Friday:
- Unemployment rate for October improved to 5.00 percent from 5.10 percent last month, exceeding the 5.10 percent consensus estimate.
- Private payrolls adds for October rose to 268.0K from 118.0K last month, exceeding the consensus estimate of 165.0k.
- Nonfarm payrolls adds for October rose to 271.0k from 142.0k last month, exceeding the consensus estimate of 180.0k.
Mohamed El-Erian: ‘Comprehensively Strong Report'
Mohamed El-Erian, Allianz's Chief Economist, told Benzinga in an e-mail that the "comprehensively strong" jobs report suggest that the Federal Reserve is "on course" to hike its rates in December for the first time in almost 10 years. The renowned economist noted his view may be contingent on an absent of "significant emerging market financial volatility."
Erian added that emerging market volatility "is a risk" given his view that "every systemically important emerging economy is slowing, two [Brazil and Russia] are already in recession, and there are pockets of financial excesses."
Indeed Economist: ‘Positive For Economic Growth Potential'
Tara Sinclair, Chief Economist for the job site Indeed, said the jobs numbers were "fantastic" while wage gains were "finally strong."
Sinclair said the report "tips the scales" towards a rate hike in December. She added that, more importantly, the jobs data "is a sign that our economy may have more punch than we thought" heading into 2016.
"For many months we've been looking for stronger wage growth and robust job numbers to match high employer demand," Sinclair said. "This month's report finally starts to line up with what we have been waiting for from the labor market. The numbers show that employers got serious about hiring people in October, and job seekers responded."
Sinclair also noted that Indeed's own job search data indicates five straight months of job posting growth by employers, but she hasn't been seeing the hiring to match the demand – until now.
"If people continue to fill these job openings it will be a positive for what has been lackluster economic growth," she concluded.
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