The U.S. economy added 204,000 jobs in October, an unexpected burst of hiring during a month in which the federal government was partially shut down for 16 days.
The Labor Department said Friday that the unemployment rate rose to 7.3 percent from 7.2 percent in September, likely because furloughed federal workers were counted as unemployed. The report noted that the shutdown did not affect total jobs.
Employers also added 60,000 more jobs in the previous two months than earlier estimated.
The figures show hiring has picked up in the fall. Employers added an average of 202,000 jobs from August through October, up from 146,000 from May through July.
Stock futures fell after the report was released at 8:30 a.m. EDT, and the yield on the 10-year Treasury note rose. That suggests investors are worried that the better job numbers will prompt the Federal Reserve to pull back on its stimulus efforts sooner than expected.
One troubling detail in the report: The percentage of Americans working or looking for work fell to a fresh 35-year low. But that figure was likely distorted by the shutdown, too.
About 800,000 government workers were furloughed for all or part of the shutdown, which lasted from Oct. 1 through Oct. 16. Many were counted as unemployed and on temporary layoff for purposes of the unemployment rate.
But the furloughed workers were still counted as employed by the government’s survey that counts jobs because they were ultimately paid for their time off. Federal government jobs fell only 12,000 last month.
Some reports have hinted that hiring was improving. Retail stores, shipping companies, and other services firms stepped up hiring in October, according to private survey of service firms.
And the number of people seeking unemployment benefits has fallen back to pre-recession levels after four weeks of declines. Unemployment benefit applications are a proxy for layoffs. The steady decline suggests companies are cutting fewer jobs.
Economic growth accelerated in the July-September quarter to an annual rate of 2.8 percent, the government said Thursday. That’s up from 2.5 percent in the April-June quarter.
But greater restocking by businesses drove much of the increase, a trend that may not be sustainable. Consumers and businesses both cut back on spending over the summer.
Courtesy of Los Angeles Times