Employers Add 151,000 Jobs in October

By: AP
By: AP

WASHINGTON — Employers added 151,000 jobs in October, soundly beating estimates, as professional and business services and the health, education and retail industries beefed up staffing, the Bureau of Labor Statistics reported Friday.

The unemployment rate, calculated from a different survey, was unchanged at 9.6%.

The private sector added 159,000 jobs, most since April and double the 80,000 expected by economists. And the total 151,000 jump in non-farm payrolls was the first increase since May, far exceeding the 60,000 anticipated. The lion's share of job losses in recent months stemmed from layoffs of temporary U.S. Census workers.

Equally heartening: The government revised upward its estimate of job gains in August and September by a total 110,000. It now says the private sector added 250,000 jobs those months, up from the original 157,000 estimate.

"It suggests to me we're accelerating out of the soft spot we were in from April to September," says economist John Canally of LPL Financial.

Yet few economists believe the heartening report signifies a marked surge in job growth and the economy. As a result, it's unlikely to alter the plan announced by the Federal Reserve this week to buy $600 billion in Treasury bonds over the next eight months to lower long-term interest rates and stimulate the economy.

"This is good news, but it may be an overstatement of the underlying strength of job growth," says Wells Fargo Chief Economist John Silvia.

Silvia expects the economy to add about 100,000 jobs a month the first half of next year — a modest increase over this year but far short of the 200,000 or so needed to bring down the unemployment rate.

In October, 254,000 Americans left the labor force, including many discouraged workers who gave up looking for work. As more people re-enter the workforce when jobs grow more plentiful, it will become harder to lower the unemployment rate.

At the very least, the latest report helps ease fears that the economy might slip back into recession. "It definitely puts the nail in (concerns over) a double-dip" recession, Silvia says.

The news comes on the heels of other positive reports that show both the manufacturing and service sectors have been expanding smartly.

The employment report includes several encouraging signs. The number of people working part-time even though they wanted full-time work fell by 318,000 to 9.2 million after rising by nearly 1 million the previous two months. That helped push down the underemployment rate — which also includes the unemployed and discouraged workers who've given up the job hunt — to 17% from 17.1% in September.

Also, employers added 35,000 temporary workers and have added 451,000 since September. A rise in temporary workers typically preceeds an increase in permanent staffing, though that shift has been slow to take place in this recovery.

The work week, meanwhile, ticked up to 34.3 hours from 34.2 in September and has generally trended up this year. As employers stretch existing workers to their limits, they'll have to ratchet up hiring, economists say.

Average hourly earnings rose 5 cents to $22.73 from $22.68 — a positive harbinger for consumer spending, which accounts for 70% of the economy.

At the same time, the report still illustrates a job market that's far from healed. About 14.8 million Americans were unemployed last month and 41.8% of them — 6.2 million — have been out of work at least six months.

Among industries, education and health services led the hiring surge, adding 53,000 jobs, up from 17,000 the previous months. Professional and business services added 46,000, which included 40,000 managerial office workers in addition to the 35,000 temporary positions. And retailers added 28,000.

But local governments, which have been hemorrhaging jobs since last year as they struggle to balance budgets, cut another 7,000. That, however, was far less than the 76,000 slots they chopped in September.

The federal government, meanwhile, laid off 5,000 temporary U.S. Census workers and only 1,000 remain on the payroll. That means heavy Census layoffs that swelled job losses in recent months are essentially over.

Manufacturers trimmed 7,000 jobs, a development that surprised economists in light of recent reports showing solid expansion in that sector. And the construction industry added just 5,000 slots.

Speaking after the government released the jobs report, President Obama said he's "open to any idea, any proposal" that will increase the pace of economic growth. And, he said the country can't afford two years of partisan gridlock in Washington.

The president, preparing to leave on an Asian trip, said America cannot get bogged down in political fights while other countries, like China, are moving forward aggressively to build their economies.

So far this year, the economy has added 874,000 jobs, more than a million in the private sector. But that comes after the nation lost more than 8 million jobs in 2008 and 2009.

On Wednesday, the Federal Reserve announced a plan to buy $600 billion in Treasury bonds in an effort to pump cash into the economy and accelerate economic growth. Those purchases are intended to lower interest rates on mortgages and other loans and spur more borrowing and spending.

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