Businesses hired 250,000 workers in October as wages rose most in 9 years

Last Updated Nov 2, 2018 10:49 AM EDT

U.S. businesses added 250,000 jobs in October, the Labor Department said on Friday—a blowout number that surpassed Wall Street's expectation. Jobs were added in health care, construction, manufacturing and transportation and warehousing.

The monthly average job creation now stands at about 210,000 for the last three months. That incorporates revised data for September, which saw an unusually low jobs figure thanks to Hurricane Florence. Hurricane Michael, which hit the Florida panhandle last month, did not affect the jobs report, the Labor Department said.

Wages jumped. Average monthly earnings increased 3.1 percent from the year before, the first time in the current economic expansion that the figure has crossed the 3 percent mark. Other data released this week shows that compensation costs are now rising more quickly. The last time wages grew this quickly was in early 2009.

The unemployment rate stayed at 3.7 percent, the lowest it's been in nearly 50 years. Adding to the positive news, the labor participation rate—the share of people working or searching for work—ticked up .2 percent. It moved up half a percentage point for workers in the 25-to-55 age group.

"This is an astonishingly good jobs report," said Julia Pollak, labor economist with the job site ZipRecruiter. "With the labor participation rate up .2 percent, it shows that people are still coming in off the sidelines. Many people thought that would not be the case."

The good news foreshadows more interest-rate increases from the Federal Reserve. "With consumer confidence at its highest point since 2000 and GDP growth at an impressive 3.5% this quarter, there is an even stronger case for continuing to raise interest rates into 2019," said Steve Rick, chief economist at CUNA Mutual Group.