US hiring beats expectations in face of Fed interest rate rises

US employers added more jobs in October than projected while the unemployment rate rose slightly, giving the Federal Reserve a mixed batch of data as the central bank looks for indicators to reduce its interest rate increases.

Nonfarm payrolls increased by 261,000 last month, Friday's report from the Labour Department showed. Notable job gains were found in health care, professional and technical services, as well as manufacturing, the report said.

A Bloomberg survey of economists called for a 193,000 advance in payrolls.

Data for September was revised to show 315,000 jobs added instead of 263,000 jobs, as reported last month.

Friday's report also showed wages were up 0.4 per cent from September and 4.7 per cent from a year earlier.

The nation's unemployment rate rose to 3.7 per cent, up from 3.5 per cent for the month before, suggesting a minor softening of the labour market that would allow the Fed to implement smaller interest rate increases beginning in December.

The US central bank on Wednesday raised interest rates by 75 basis points for a fourth time in a row but suggested it could be nearing a turning point in its tightening of monetary policy.

Speaking to reporters after the announcement, Fed chairman Jerome Powell said labour market conditions have not softened in an “obvious” way. Mr Powell also said it would take time for the interest rate increases to have an effect on the economy.

President Joe Biden acknowledged the inflation crisis gripping the country, but rejected arguments that the answer to cool soaring costs is layoffs.

“Let me be clear. We’re going to do what it takes to bring inflation down. But as long as I’m president, I’m not going to accept an argument that the problem is that too many Americans are finding good jobs,” he said in a statement.

Futures on the S&P 500 rose 1.2 per cent as of 9.11am ET. Futures on the Nasdaq 100 rose by 1.6 per cent. Treasury yields changed little. Meanwhile, traders are still expecting the Fed to raise interest rates by half a percentage point in December, Bloomberg reported.

The Federal Open Market Committee said it would consider multiple factors — including “the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments” — when implementing future interest rate increases.