US adds 271,000 jobs in October

he US economy added 271,000 jobs in October, which is much stronger than the 185,000 figure that economists had been expecting.

That strong number will raise expectations that the US Federal Reserve will raise interest rates at its policy meeting in December.

At its October meeting, the Fed said it was watching the global economy and US labour market for signs of strength.

The jobless rate fell to 5% - the lowest level in seven-and-a-half years.

There was positive news on previous reports, with the number of jobs created in August and September raised by a net 12,000.

'Astounding number'

In October, job creation was strongest in professional and business services, health care, retailing, restaurants and bars, and construction.

And there was a strong rise in wages last month. Average hourly earnings rose nine cents to $25.20, which is a 2.5% rise on a year earlier.

"That was an astounding number. The uptick in the manufacturing workweek was also encouraging. It's pretty clear that the Fed would be justified in hiking in December, if the economy doesn't hit another air pocket," said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds.

Earlier this week, Janet Yellen, chair of the US Federal Reserve, told a Congressional committee that a rise in US interest rates in December was "a live possibility".

Multiple moves?

Some economists think that a rise in December might be the start of a series of rate rises.

"It's almost a sure thing that the Fed will tighten in December. Based on their communication, they might move every other meeting," said Mike Bazdarich, an economist at Western Asset Management.

The US dollar jumped following the report, adding one-and-a-half euro cents to €0.9311. Against the pound it strengthened by more than a cent to $1.5047.

"Mark your calendar for 16 December - markets are aggressively pricing in the first Federal Reserve rate hike for next month," said Christopher Vecchio, currency analyst at DailyFX.

"The US dollar is soaring across the board this morning after the October jobs figure blew past expectations, reaffirming the belief that the US economy is approaching the event horizon of the end of ZIRP (zero interest rate policy)."