From the Washington Post:
The U.S. job market has almost fully healed from the deep wounds of the Great Recession, raising expectations that the Federal Reserve will begin withdrawing its support for the recovery by the end of the year.
Government data released Friday showed the economy added a blockbuster 271,000 jobs in October — the highest amount so far this year and beyond analysts’ most optimistic forecasts. The unemployment rate dipped to 5 percent, and wages rose at the fastest pace since 2009.
The stellar performance provided reassurance that the American economy can withstand powerful global headwinds, from the slowdown in China to the threat of deflation in Europe. A healthy labor market could also give policymakers at the nation’s central bank the confidence to raise its key interest rate target for the first time in nearly a decade.
“The economy’s course is steady and true,” said Chris Rupkey, chief financial economist at MUFG Union Bank. “The reasons for Fed caution and delay are falling to the wayside as this economic expansion is the real deal.”
The probability that the central bank will move at its next meeting in December jumped to nearly 75 percent on Friday, according to futures markets, up from roughly even odds a week ago. Barclays reined in its forecast from March 2016 to December. Famed investor Bill Gross of Janus Capital was unequivocal, telling Bloomberg TV he believes the chances are “almost 100 percent that the yellow light changes in December to bright green.”
The move would mark the beginning of the end of an unprecedented era of easy money that cushioned the American economy during the downturn but has not produced robust growth in the recovery.