U.S. Economy Adds 171K Jobs; Unemployment Rate Rises To 7.9 Percent
U.S. employers added 171,000 jobs in October, and hiring was stronger in August and September than first thought. The unemployment rate inched up to 7.9 percent from 7.8 percent in September.
The Labor Department's last look at hiring before Tuesday's election sketched a picture of a job market that's gradually gaining momentum after nearly stalling in the spring.
Since July, the economy has created an average of 173,000 jobs a month. That's up from 67,000 a month from April through June.
Still, President Barack Obama will face voters with the highest unemployment rate of any incumbent since Franklin Roosevelt. The rate rose in October because more people began seeking work and were counted as unemployed. The government counts people without jobs as unemployed only if they're looking for one.
The work force - the number of people either working or looking for work - rose by 578,000. And 410,000 more people said they were employed. The number of unemployed increased 170,000 to 12.3 million, pushing up the unemployment rate.
The increase in the work force "could be a sign that people are starting to see better job prospects and so should be read as another positive aspect to the report," said Julia Coronado, an economist at BNP Paribas.
Investors were pleased by the news. The Dow Jones industrial average futures were flat before it came out at 8:30 a.m. EDT, and within 30 minutes they were up 54 points.
The yield on the benchmark 10-year U.S. Treasury note climbed to 1.77 percent from 1.72 percent, a sign that investors were moving money out of bonds and into stocks.
Friday's report included a range of encouraging details.
The government revised its data to show that 84,000 more jobs were added in August and September than previously estimated. The jobs gains in October were widespread across industries. And the percentage of Americans working or looking for work rose for the second straight month.
The economy has added jobs for 25 straight months. There are now 580,000 more than when Obama took office.
But there were also signs of the economy's persistent weakness. Average hourly pay dipped a penny to $23.58. In the past year, pay has risen just 1.6 percent. That has trailed inflation, which rose 2 percent.
The October jobs report was compiled before Superstorm Sandy struck the East Coast earlier this week and devastated many businesses.
The nascent housing recovery is finally generating jobs. Construction firms added 17,000 positions, the most since January. Manufacturers added 13,000 jobs after shedding workers in the previous two months. Professional services such as architects and computer systems providers also added jobs, as did retailers, hotels and restaurants, and education and health care. Government overall shed 13,000 jobs, after three months of gains.
The economy has picked up a bit in recent weeks. Americans are buying more big-ticket items, like cars and appliances. Auto companies reported steady sales gains last month despite losing three days of business to the storm in heavily populated areas of the Northeast.
Yet businesses remain nervous about the economy's future course. Many are concerned that Congress will fail to reach a budget deal before January. If lawmakers can't strike an agreement, sharp tax increases and spending cuts will take effect next year and possibly trigger another recession.
American companies are also nervous about the economic outlook overseas. Europe's financial crisis has pushed much of that region into recession and cut into U.S. exports and corporate profits.
This program aired on November 2, 2012. The audio for this program is not available.