U.S. economy adds 171,000 jobs; rate ticks up to 7.9 percent

In this Oct. 25, 2012, photo, a sign attracts job-seekers during a job fair at the Marriott Hotel in Colonie, N.Y.

Mike Groll / ASSOCIATED PRESS

By CHRISTOPHER S. RUGABER

Associated Press

WASHINGTON -- 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.
Investors were pleased by the news. The Dow Jones industrial average futures were flat before it came out at 8:30 a.m., 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 national report contains no local data; Florida and its counties get their October jobs report in two weeks. The new national jobless rate of 7.9 percent keeps unemployment higher than in Broward (where unemployment stood at 7.4 percent in September), and lower than in Miami-Dade (8.8 percent) and Florida (8.7 percent).
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. And the number of unemployed increased 170,000 to 12.3 million.
The October jobs report was compiled before Superstorm Sandy struck the East Coast earlier this week and devastated many businesses.
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.

October Jobs Report: There’s Work to Be Done

George Zornick on November 2, 2012 - 12:02 PM ET

The US economy added 171,000 jobs in October, beating economists’ predictions of 125,000 new jobs and, if not adding a boost to President Obama’s re-election campaign, at least denying Mitt Romney any real ammunition.
The unemployment rate ticked up a statistically insignificant 0.1 percent, to 7.9 percent, which is a full point lower that what it was one year ago. The slight increase was a result of more people entering the workforce looking for work—which is a promising sign. (Though, even with the increase, the labor force participation rate hasn’t been this low since the early 1980s.)
Other good news: the economy is clearly improving from where it was earlier this year. The August and September numbers were revised upwards, meaning 173,000 jobs were added on average per month over the last four months, compared with 67,000 in the previous quarter. Manufacturing added 13,000 jobs in October, stopping a slide the previous two months (when 13,000 and 14,000 manufacturing jobs were lost) and overall this year factory employment is up 189,000 jobs. Virtually every sector saw gains: the professional services, retail and hospitality all ticked upwards as well. There have now been thirty-two straight months with private-sector job creation.
Alas, the public sector continues to suffer. Last month it lost 13,000 jobs. State and local payrolls do not seem to be recovering from the downturn’s brutal losses, remaining at best stagnant. There was other bad news as well: today’s report showed an alternative unemployment rate—that is, including people who are working part-time while looking for full-time work—to be 14.6 percent. That’s 5.8 percent higher than the start of the recession, and it means that altogether, 23 million people are unemployed or underemployed. Long-term unemployment is also still deeply troubling: 40.6 percent of the 12.3 million unemployed have been looking for work for twenty-seven weeks or longer, far surpassing any recent pre-recession historical benchmark for those measures.
As far as the presidential election goes, this report is much more blip than game-changer: it shows steady, but insufficient, progress. Both campaigns can work with that. Said Obama in Ohio this morning: “We’ve made real progress, but we’re here today because we know we have more work to do.” Meanwhile, Romney put out a statement promising better than just sluggish growth: “When I’m president, I’m going to make real changes that lead to a real recovery, so that the next four years are better than the last.”
Where the candidates agree—and where they are both right—is that this level of job growth is simply not good enough. At this rate, it would still take a decade to reach full employment. Widespread economic pain for millions of families shouldn’t be allowed to persist for that long, certainly in a country with as many resources as the United States.
Where the candidates differ sharply is their approach to fixing that problem. Obama has laid out his plans: stimulative measures like the American Jobs Act, which analysts say would add 2 million jobs to the economy. In interviews, he has also made it clear that infrastructure investments will be a top priority in his second term. Romney’s approach, meanwhile, is austerity: dramatically reduced federal spending and a balanced federal budget. He also wants lower taxes and less regulation.
Next week’s election is a clear referendum between these to very different approaches—one that, by most analyses, Obama will win. In an ideal world, Tuesday’s vote would settle the question and Obama could aggressively move forward with implementing his approach. The situation demands it; sub-200,000 job monthly growth cannot be the norm.
The recent history of gridlock in Washington suggests it won’t be so easy—but Obama should act aggressively on his mandate of investment, and cement the country’s rejection of austerity.

Today's Jobs Report, Showing More Gains, Destroys Right-Wing 'Cooked' Claims

Greg Mitchell on November 2, 2012 - 8:55 AM ET

I’ve had to warn here, every month, that despite the media and political hype, the monthly US jobs report never seems to move the polls. But here’s this month’s, just out at 8:30 am: Unemployment up slightly from 7.8 percent to 7.9 percent, but with 171,000 jobs added, a nice number (beating expectations), plus more than 80,000 gained in revisions to previous months. August revised up from 142,000 to 192,000, September revised up from 114,000 to 148,000.
Now awaiting how these numbers “cooked.” One of the right-wing (led by Jack Welch and Donald Trump) claims last month: those August and September numbers would be revised downward now after their cooking time ended. Did not happen.  David Kurtz of Talking Points Memo observes:  "The way the Bureau of Labor Statistics didn’t count nearly 100,000 new jobs back in August shows how deeply involved the White House was in monkeying with the numbers."
By the way, numbers show the reason so many jobs were added, but unemployment rose, was because 578,000 joined the work force, countering another GOP argument that jobs numbers look better only because so many have stopped looking for work.
Ezra Klein: “This jobs report is good, but it won’t change the race. Which is as it should be.” Business Insider: “Markets jump on jobs report.”
And if you haven't seen: Nate Silver upped his odds on Obama winning to 80.9% today.  Even Rasmussen found him gaining on Romney, and now even with him.