The U.S. economy added a better-than-expected 271,000 jobs in October, and the nation's unemployment rate fell to a seven-year low of 5 percent, according to the Bureau of Labor Statistics.
There was also a 9-cent increase in average hourly earnings last month, bringing the figure to $25.20. Wages have increased 2.5 percent from one year ago. Year-over-year wage growth has not been that strong since July 2009.
Meanwhile, the labor force participation rate held steady last month at 62.4 percent, the lowest it's been since the late 1970's.
Elise Gould, senior economist at the Economic Policy Institute, issued this statement in response to October's employment report:
This morning's BLS employment situation report shows the economy added 271,000 jobs in October and the unemployment rate fell slightly to 5.0 percent. Nominal wage growth also picked up, rising 2.5 percent over the year.
While this was all-in-all a solid report, policymakers should not be too hasty to act on one month of data. This promising jobs number comes on the heels of much slower growth this year than last (an average of only 199,000 a month in the first three quarters). Furthermore, the employment-to-population ratio remains where it was back in January and despite a slight increase this month wage growth remains below a reasonable target.
The Federal Reserve should keep in mind the lackluster growth we've seen throughout 2015 and continue to let the economy recover. They should not raise interest rates until wages rise further and for a sustained period of time, and people on the edges of the economy get jobs.