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Brian Chappatta

Why Jerome Powell Absolutely Loves This Jobs Report

The better-than-expected figures for October keep the Fed on track to raise rates as soon as mid-2022.

A full return to a pre-Covid workforce probably isn't a Fed requirement for rate increases.

A full return to a pre-Covid workforce probably isn't a Fed requirement for rate increases.

Photographer: Joe Raedle/Getty Images

October’s U.S. employment report was strong in virtually every respect — a sorely needed jolt of confidence in the labor market after months of missed forecasts and hand-wringing about vacant jobs. It also backed up some notable comments from Federal Reserve Chair Jerome Powell earlier this week when he was asked how to define “maximum employment.”

That term, of course, is one of the bedrocks of the central bank’s new policy framework for raising interest rates. Powell said at his press conference Wednesday that the labor market is “clearly not” at a level the Fed deems consistent with full employment. That’s almost certainly still the case even after the latest figures, which showed nonfarm payrolls increased 531,000 last month and were revised higher by 235,000 in the previous two months, causing the unemployment rate to fall to 4.6%. For context, that’s lower than the rate in December 2016, when policy makers embarked on two years of tightening.