Strong Payrolls Raise Retailer Expectations for the Strongest Sales Season

US job growth is soaring accompanied by strong payrolls increase, which means consumers have money to spend, increasing retailers' hopes as it approaches its strongest and biggest sales season with Black Friday and Christmas before the year ends.

"The consumer should be feeling pretty good heading into the last couple of the months of the year," Omaha Wells Fargo Investment Institute global equity strategy co-head Sean Lynch said in a report published by Reuters. "We think we could be set up for a little bit of a (stock market) rally here into year-end."

According to an article from 24/7 Wall St the US Department of Labor announced Friday that non-farm payrolls increased by 271,000 in October. Bloomberg only expected 190,000, while Dow Jones projected 183,000. Meanwhile, private sector payrolls rose 268,000, beating Bloomberg's 174,000 expectations. Unemployment is as Bloomberg and Dow Jones expected, which is at 5.0 percent. Meanwhile, the average hourly earnings went up 0.4 percent, beating the 0.2 percent that was expected.

An article from The Guardian reported that analysts expect the Federal Reserve to increase interest rates in their December meeting if the job growth is more than 150,000. Moody's analytics chief economist Mark Zandi, said, "The national economy is fast approaching full employment. Underlying job growth - abstracting from the monthly vagaries of the data - is close to 175,000 per month."

"At this pace, if sustained, which seems likely, the economy will be at full employment by next summer. Pressure on the Fed to begin normalizing interest rates is also mounting as full employment approaches," said Zandi.

Finally, according to the Friday report from the Department of Labor, US wage growth is speeding up with hourly earnings up 2.5 percent in the past year, which is an increase from last month's 2.2 percent. This is good news for retailers who expect higher-earning workers to spend more on goods.