Hassett Says US Labour Demand Skyrocketing After Jobs Beat

White House National Economic Council Director Kevin Hassett has described US demand for workers as “skyrocketing” after a stronger-than-expected October jobs report, and said he is not worried that the hiring surge will push up inflation, Yahoo Finance reported.

Speaking in an interview with Yahoo Finance on Friday, Hassett also said he did not expect the strong data to add pressure on the Federal Reserve to raise interest rates, even as markets lean towards a hike next month.

Hiring beats forecasts

US employers added 165,000 jobs in October, well above forecasts, while the unemployment rate eased to 4.1% from 4.2%, according to CBS News and Yahoo Finance. CBS said economists polled by FactSet had expected 65,000 new jobs, while Yahoo Finance put expectations at around 70,000.

CBS News reported that payrolls for August and September were revised up by a combined 84,000. Professional and business services added 70,000 jobs and health care 42,000. Yahoo Finance said hiring averaged 137,000 a month over the past three months.

Hassett said initial jobless claims were at their lowest since World War II and that more workers were quitting because they were confident of finding better jobs, according to Yahoo Finance. He said consumer spending had risen significantly as people felt secure in their employment.

On pay, he said wage growth “had a couple of bad months” partly because the Iran war had driven energy prices higher. Yahoo Finance reported that wages caught up last month with inflation, which grew 3.1%.

Hassett on the Fed and inflation

Hassett said Fed Chairman Kevin Warsh recognises that strong growth does not automatically lead to inflation as long as it is driven by supply. He said that if growth is demand-driven, the Fed needs to raise rates, but if it is supply-driven, policymakers should look at the inflation figures. He added that officials would watch inflation data before the next decision and “make the right call”.

Separately, PANews reported that Hassett said on November 6 that the AI bubble is “indeed a concern”, but that the economy is still expected to grow strongly even if growth in the data centre sector slows. He also said inflation should slow and that the administration would respect the judgment of Warsh and the Fed, the outlet reported.

Markets are pricing in a nearly 80% chance of a quarter-point rate rise, Yahoo Finance said. CBS News, citing CME FedWatch, put the probability of a hike at the December 8–9 meeting at about 77%.

Olu Sonola, head of US economics at Fitch Ratings, told CBS News the report moves the policy debate further towards a December hike. Seema Shah, chief global strategist at Principal Asset Management, called it a strong rebuttal to fears of a meaningful slowdown.

What’s next

The Fed’s next policy meeting is scheduled for December 8–9, according to CBS News. Hassett also said the White House is moving ahead with a process to determine whether President Donald Trump has cause to remove Fed Governor Lisa Cook, Yahoo Finance reported. A hearing first set for November 5 has been pushed back to December, the outlet said.

#businessnews