US private-sector employment rocketed higher in October, the Labor Department reports. Last month’s bigger-than-forecast 268,000 increase is the biggest monthly rise so far in 2015 and dramatically above the soft increases in the previous two months. The gain is strong enough to dispense the first improvement in the annual pace of growth since May. It remains to be seen if the bullish rebound survives future revisions and endures in the months ahead. But for the moment, today’s employment report just gave the Federal Reserve a green light to start rising interest rates.

“It’s a shocking number,” John Canally, chief economic strategist at LPL Financial,tells Bloomberg. “People need to prepare for a December rate hike. I’d expect the probability of a December liftoff to go to the low 90[% probability] unless something really bad happens between now and then. There’s no soft spot in the economy, that’s over. Things are tightening all around.”


Perhaps, although it’s dangerous to radically revise one’s economic outlook based on one number. Nonetheless, there’s no other way to spin the data du jour as anything less than bullish in no uncertain terms. Not surprisingly, the initial reaction in the bond market is to sell, which of course translates into higher yields. The benchmark 10-year yield at the moment (roughly 9:40 am New York time) is up sharply to 2.32%, the highest level since July.

The question is whether today’s hefty improvement in the employment data marks the return of a sustained reacceleration of US growth? The jury’s still out, but suddenly that’s a distinct possibility, although it’ll take another round or two of economic releases to confirm the revival in macro fortunes. But until we learn otherwise in the reports to come, the game has changed and the focus turns to growth and how the markets and economy will fare at what appears to be the start of a higher-interest-rate regime as of next month’s FOMC meeting.

“Barring a disaster in November, rates are going to rise in December,” predicts Ian Shepherdson, chief economist at Pantheon Macroeconomics.

For today, at least, resistance in the form that argues otherwise is futile.