Friday, November 5, 2010
Employers boosted jobs at a faster pace in October than at any time in nearly half a year, but the unemployment rate remained stubbornly at 9.6 percent — further evidence of what the Federal Reserve has termed a "disappointingly slow" recovery.
The economy added a larger-than-expected 151,000 jobs last month, but the unemployment rate remained at 9.6 percent, the Labor Department said Friday
Employers added a net 151,000 jobs last month, the most since May. Wall Street analysts had expected a gain of only about 60,000 jobs.
President Obama said the unemployment rate is "still unacceptably high and we need to do more.
"The fact is, an encouraging jobs report doesn't make a difference if you're still one of the millions of Americans looking for work," he said shortly after the numbers were released.
Reaching out to Republicans, who won control of the House in Tuesday's election, the president said, "I am open to any idea, any proposal, to make the economy grow faster."
Nigel Gault, economist with IHS Global Insight, said the numbers "are encouraging at first blush and even on closer examination, they still look good."
"I think the important thing is that the numbers are telling us we're continuing to grow, that the recovery is still in place and we're not at risk of falling back into that dreaded double-dip [recession]," he told NPR.
Private employers hired 159,000 workers, while governments at all levels shed only 8,000 jobs, a much better showing than September's sharp drop. The biggest gains came in the health care and education sectors.
The Labor Department also revised payrolls for August and September. The new figures show 110,000 fewer jobs were lost in those months.
"The total job gain was one of the strongest we've seen in a very long time," said Brian Wesbury, chief economist at First Trust in Chicago.
"I expect the GDP report in the fourth quarter to actually show between 4- and 5-percent growth and if that happens, I think we'll see these job numbers accelerate in the months ahead," he said.
The unemployment rate, however, which is measured by a separate survey of households, remained at 9.6 percent for the third straight month.
Most economists say gains of 200,000 or more jobs a month over several months are needed to bring the unemployment rate down.
Wesbury and Gault both point to the lengthening work week as a signal that the jobs picture should continue to improve, even if sporadically, in the months ahead.
Employers extended the average workweek to 34.3 hours, up by one-tenth of an hour, in October. Typically, once employers have exhausted the possibility for extending the hours of existing employees they begin rehiring.
"We're bumping up to the kind of length of the workweek that's going to require more employment," Wesbury said.
Concern about bleak employment figures was one factor that prompted the Federal Reserve to pump $600 billion into the economy in a controversial move known as quantitative easing. Gault said had the employment report come out earlier, he thinks it would not have dissuaded the Fed's action.
"I think it would have taken away some of their worst fears about the downside risks, but I think they still would have gone ahead," Gault said. "And, as we move forward, the Fed is perfectly at liberty to adjust its plans if it turns out that the economy does substantially better than they were anticipating."
The economy is growing, but at a weak pace. The Commerce Department said last month that gross domestic product, the broadest measure of the nation's output, increased by 2 percent in the July-September period. That isn't fast enough to encourage much hiring.
High unemployment helped stoke voter anger in congressional elections earlier this week. The Republican Party took control of the House and made significant gains in the Senate.