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US economy adds forecast-beating 128,000 jobs in October

The US economy added more jobs than expected in October, defying concerns that a strike at General Motors would weigh on the employment market.

Non-farm payrolls rose by 128,000 last month from an upwardly revised 180,000 (previously 136,000) in September, according to data from the US labour department on Friday. That blew past median forecasts among economists for the addition of 89,000 jobs, according to a Refinitiv poll.

The unemployment rate ticked up as expected to 3.6 per cent from 3.5 per cent, which had been the lowest point since December 1969.

The October data showed a limited headline impact from a strike at General Motors, which saw thousands of workers walk off the job for six weeks amid negotiations over pay and production plans, costing the automaker nearly $3bn.

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The data suggest the labour market remains a bright spot for the US, and is helping underpin the economy’s main driver — consumer spending. Even so, the Federal Reserve decided on October 30 to lower its benchmark interest rate for the third consecutive meeting.

Some recent weak readings on domestic manufacturing activity, largely an impact of Washington’s trade war with Beijing, were a key driver behind the central bank’s decision to ease monetary policy again. However, it signalled it is done with cutting rates for the time being.

Futures for the S&P 500 jumped to an 0.4 per cent gain, having been up about 0.1 per cent before the release of the data. Treasuries sold off, with the yield on the benchmark 10-year Treasury up 2.3 basis points to 1.7138 per cent, having been down 1.9bp at 1.6718 per cent previously.

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