October saw the labor market return to form after a two-month slowdown, adding 271,000 net new jobs across industries. This brought down unemployment to 5 percent, the lowest rate seen during the recovery so far.
Notable over the past few months has been a rise in wages in an otherwise low-inflation environment, which will boost GDP personal expenditures in the coming quarters. Wages have risen by 2.5 percent, greater than the increase in jobs (2.0 percent) and prices (no growth).
Similarly, bachelor’s degree-holder unemployment of 2.5 percent means that companies are actively recruiting talent, giving workers improved confidence.
These improvements in fundamentals are also boosting the chance of an interest rate hike by year-end, as the economy continues to approach the Federal Reserve’s targets.