U.S. economic data seen supporting December interest rate hike
By Lucia Mutikani
WASHINGTON (Reuters) - U.S. private employers maintained a steady pace of hiring in October and a jump in new orders buoyed activity in the services sector, suggesting the economy was strong enough to support an interest rate hike from the Federal Reserve in December.
The economic outlook was further brightened by another report on Wednesday showing the trade deficit hit a seven-month low in September as exports rebounded, a tentative sign the worst of the drag from the stronger dollar may be over.
Fed Chair Janet Yellen told lawmakers on Wednesday the U.S. economy is "performing well" and a December rate hike could be justified.
"You have a set of data thus far that tells the Fed that things are in good shape going into the fourth quarter and is giving them the green light to go," said Jacob Oubina, senior U.S. economist at RBC Capital Markets in New York.
The ADP National Employment Report showed private payrolls increased 182,000 last month on top of the 190,000 jobs added in September. Job gains last month were broad-based, though manufacturing lost 2,000 positions.
The ADP report, which is jointly developed with Moody's Analytics, was released ahead of the Labor Department's more comprehensive employment report on Friday.
According to a Reuters survey of economists, nonfarm payrolls increased 180,000 in October, well above the average gain of 139,000 jobs for August and September.
Economists say the expected October job gains would be seen as sufficient for the Fed to raise its benchmark overnight interest rate from near zero at its Dec. 15-16 policy meeting. The unemployment rate is forecast to be steady at 5.1 percent. Continued...