US October nonfarm payrolls far exceed expectations, market increases bets on a Fed rate hike in December.

BlockBeats news, November 6 - U.S. job growth accelerated significantly in October, with the unemployment rate edging down, indicating that the labor market remains strong amid continued economic expansion. Data released by the U.S. Bureau of Labor Statistics on Friday showed that nonfarm payrolls increased by 165,000 in October, with employment data for the previous two months both revised upward. The unemployment rate fell to 4.1%. Since the beginning of the year, resilient consumer spending and strong business investment have supported market demand and driven corporate profit growth, prompting businesses to increase hiring. Although job growth has been uneven across months, overall hiring strength remains sufficient to keep the unemployment rate at a low level. Before the Federal Reserve holds its next policy meeting in December, officials will also receive one more employment report and a full set of inflation data.

Following a rate hike in September and a decision to keep rates unchanged in October, investors expect the Federal Reserve to raise rates again in December to curb inflation. After the data was released, U.S. short-term interest rate futures fell following the nonfarm payrolls report, and traders increased their bets on a Federal Reserve rate hike in December. Friday's data also showed that job growth was broadly distributed across multiple industries, with professional and business services and healthcare posting the largest employment gains.

After the report was released, futures contracts tied to the Federal Reserve's policy rate showed that the market expects about an 80% probability of a 25-basis-point rate hike by the Federal Reserve next month. Before the report was released, traders' probability bets on a December rate hike were about 75%.