US adds jobs for first time since May

WASHINGTON (AFP) - The United States saw a mini jobs boom in October, snapping a four-month streak of payroll losses but not enough to dent the high unemployment rate, official data showed Friday. The Labor Department reported the creation of 151,000 nonfarm jobs in October, much better than expected, and the jobless rate as expected remained unchanged at 9.6 percent for the third month in a row. The number of new jobs was more than double the 60,000 forecast by most analysts. The Labor Department slashed its initial estimate of 95,000 job losses in September to 41,000. The private sector powered the turnaround, according to the report, especially the vast services sector, which makes up more than 80 percent of the US economy. The private sector added 159,000 jobs, eclipsing the loss of 8,000 government payrolls. Service providers added 154,000 jobs. The consensus forecast was for 60,000 new private-sector jobs in October. The department hiked its original September estimate of 64,000 private payrolls to 107,000. This was an excellent report that shows the economy is moving on a slow and steady pathway toward full recovery, said Joel Naroff at Naroff Economic Advisers. The business sector is joining in the party and it also appears that small to midsized firms are adding workers as well. The jobs report and its details suggested a stronger recovery was underway in the private sector than previously believed. On Wednesday, the Federal Reserve made persistently high unemployment a prime argument for announcing it would pump an additional 600 billion dollars into the banking system through the middle of next year. The Fed, as expected, repeated that it would not raise near-zero interest rates any time soon. Naroff said the jobs report supported his belief that the Fed may have to start raising rates sooner than most currently believe. President Barack Obama, whose Democrats were trounced by Republicans in congressional and local elections Tuesday, hailed the report as encouraging news, but said it was not good enough to bring down an unacceptable unemployment rate. I am open to any idea, any proposal, any way we can get the economy growing faster so that people who need work can find it faster, he said, including tax breaks which are popular among Republicans. Wages and hours worked rose in October, the Labor Department reported. Employees worked an average 34.3 hours a week, up one tenth point from September. Average weekly earnings rose to 779.64 dollars from 775.66 dollars. Although employers appeared to have shrugged off concerns about the sluggish pace of the economic recovery, the job growth was still below the roughly 200,000 new jobs per month economists say are needed over some time to chip away at unemployment. Even though Octobers job growth is a step in the right direction, given the backlog of 14.8 million unemployed workers in this country, the pace of job growth is not strong enough to bring the unemployment rate down to pre-recession levels anytime soon, said Heidi Shierholz at Economic Policy Institute. For example, at Octobers rate of job growth, the economy would achieve pre-recession unemployment rates such as 5.0 percent in December 2007 in roughly 20 years, she added.

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