WASHINGTON (CBS.MW) - U.S. nonfarm payrolls increased by a surprising 337,000 in October, about double the expectation, the Labor Department reported Friday.
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It was the largest gain in nonfarm payrolls since March. In addition, payroll gains in August and September were revised higher by a cumulative 115,000, according to the government survey of 400,000 workplaces.
Meanwhile, a separate survey of 60,000 households showed both employment and unemployment rose during the month. The unemployment rate climbed a tenth to 5.5 percent. The labor participation rate was steady at 65.9 percent.
Economists were expecting payrolls to grow by about 175,000 in October and for the unemployment rate to remain at 5.4 percent, according to a survey conducted by CBS MarketWatch. See Economic Calendar.
A part of October's hiring surge was due to rebuilding and cleanup activities in the Southeast following four hurricanes in August and September, said Kathleen Utgoff, commissioner of the Bureau of Labor Statistics. She did not quantify the extent of hurricane-related hiring.
Job growth has averaged 225,000 in the past three months, up from 141,000 in September. The economy needs about 150,000 new jobs a month to keep pace with population growth.
The Federal Open Market Committee is expected to raise its short-term interest rate by a quarter percentage point next Wednesday to 2 percent.
After that, the FOMC could pause at the late December meeting for technical reasons or to reassess how its four rate hikes this year have impacted the economy. October's strong job growth should reassure Fed officials that the economy remains on a self-sustaining path with no further need for extra stimulus from the Fed.
Since the bottom in August 2003, the economy has added about 2.2 million jobs. Since President Bush took office in January 2001, payrolls are down by about 369,000. With two more months to go, it's likely job growth will be positive for Bush's first term.
Average hourly wages increased 5 cents or 0.3 percent, to $15.83 in October. Average wages are up 2.6 percent in the past year, the strongest gain in 14 months, but barely keeping ahead of inflation.
Average workweek was steady at 33.8 hours. Aggregate hours worked in the economy increased 0.3 percent.
Manufacturing jobs decreased by 5,000, the second straight loss. Construction industries added 71,000 jobs.
Services industries added 272,000 jobs, the most since April. Retail jobs increased by 21,000. Professional and business services increased by 97,000, including 48,000 temporary help jobs.
Really an impressive number all around. I just finished reading the report. The only negative I can see is manufacturing hiring still isn't strong. But, conversely, I don't see manufacturing jobs being a big part of the US economy's future. Before getting excited, it has to be shown this is a trend and not an anomaly.