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The U.S. economy added fewer than expected jobs for the month of October, but the headline NFP figures aren’t telling the complete story. Here are four important things you should know about the latest jobs report.

1. Jobless rate surpassed Fed forecasts

forex nfp usdEven though hiring picked up by only 214,000 in October versus the estimated 235,000 increase, the jobless rate still managed to tick lower from 5.9% to 5.8%. And this wasn’t a result of a falling participation rate!

In fact, the labor force participation rate held steady at 62.8%, indicating that Americans are no longer feeling as discouraged about employment prospects as they used to. The current unemployment rate is slightly better than the Fed’s 5.9%-6% estimate for the quarter and is much lower than the 6.3%.-6.6% forecast given last December.

2. Underlying labor metrics at record levels

Apart from a stabilizing participation rate, other labor indicators also showed significant improvements. For one, the employment-to-population rate climbed a notch to 59.2% from a year ago, its strongest annualized gain in nearly a decade.

The under-employment rate, which is a broader measure of joblessness that takes into account the number of discouraged workers and people in part-time positions looking for full-time work, fell to 11.5% – its lowest level since the height of the financial recession in September 2008.

3. Wage growth remained weak

On a less upbeat note though, analysts expressed concerns about anemic wage growth, which is barely keeping in pace with U.S. inflation. Average hourly earnings posted a mere 0.1% uptick following the previous month’s flat reading and lower than the estimated 0.2% increase.

On a year-over-year basis, the average pay of private sector workers marked a 2% gain while blue-collar workers saw a 2.1% increase in wages. In fact, Fed officials believe that the modest gain in wages is also keeping overall inflationary pressures in check.

4. Fed on track to tighten next year?

At the end of the day though, the recent non-farm payrolls release seems enough to keep the Fed on track to hike interest rates sometime in 2015. After all, the latest FOMC statement indicated that “if incoming information indicates faster progress toward the Committee’s employment and inflation objectives than the Committee now expects, then increases in the target range for the federal funds rate are likely to occur sooner than currently anticipated.”

With that, forex market participants might once again look forward to hearing the Fed drop the “considerable time” wording when it comes to the time frame for keeping rates low. Analysts are also expecting the U.S. central bank to upgrade its employment forecasts when it releases the next batch of economic estimates in their December statement.

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