"The economy isn't as weak as people seem to think it is in the fourth quarter. The job market is in a phase of grinding improvement."
- Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc
Dollar extended Thursday's gains against the single currency on Friday after the data from the Bureau of Labor Statistics showed the economy created more jobs than initially was expected, while unemployment rate came in line with analysts' forecasts. The world's largest economy's companies hired 204,000 workers in October, following a revised 163,000 gain a month earlier, beating analysts' estimates, who called for a 120,000 figure. The overall unemployment rate, however, ticked up to 7.3% from a five-year low. The data are suggesting that even despite the 16-day long government shutdown, political and fiscal uncertainty, U.S. companies increased hiring, reflecting their strong confidence with respect to the future prospects.
Nevertheless, another key measure of economic health– participation rate, which indicates the proportion of working-age people in the labour force and those who are not employed, inched lower to 62.8%, hitting the lowest since March 1978, and down from 63.2% a month earlier. Moreover, much of the weakness in the latest report reflect the temporary impact of the shutdown. The majority of economists are expecting a spike in the jobless rate.