Live news: Canada adds 64,000 jobs in September, blasting past expectations

financialpost.com:

A hotter-than-expected jobs report will likely nudge the United States Federal Reserve toward raising interest rates again by the end of the year.

Nonfarm payrolls increased 336,000 last month after sizable upward revisions to the prior two months, a Bureau of Labor Statistics report showed Friday. The unemployment rate held at 3.8 per cent, and wages rose at a modest pace.

“This will keep the Fed very guarded and very much concerned about upside risk,” said Luke Tilley, chief economist at Wilmington Trust Corp., “because this plays into their concerns about a re-acceleration in the economy.”

Fed officials led by chair Jerome Powell are trying to decide whether they need to hike their benchmark lending rate again after raising it by more than five percentage points over the last 19 months. They left the rate unchanged at their last policy meeting in September, though 12 out of 19 officials signalled they would support another rate increase this year, according to projections released at the meeting.

Odds of an interest-rate hike by year’s end rose to 56 per cent following the jobs report, from 48 per cent, according to initial market pricing.

Fed officials believe the labour market remains overheated, contributing to price pressures that have pushed inflation well above the central bank’s two per cent goal.

“Reducing inflation is likely to require a period of below-trend growth and some softening of labour market conditions,” Powell said on Sept. 20.

At the same time, Powell and his colleagues on the Federal Open Market Committee have repeatedly said they will be cautious with additional moves as they near the end of their hiking cycle, suggesting some wariness about moving at the upcoming meeting that concludes Nov. 1.