Employers added more workers than forecast to payrolls in October and a rush of people entering the labor force pushed the jobless rate higher, according to the last report on the labor market before next week’s presidential election.
Broad-based gains in employment — from car dealers and hospitals to factories and construction sites — indicate consumers are likely to spend more freely and shore up the three-year expansion in the face of a global economic slowdown and political gridlock in Washington over taxes and spending.
Hiring increased by 171,000 workers after a 148,000 gain in September that was bigger than first estimated, Labor Department figures showed in a Friday report. October’s increase exceeded the most optimistic forecast in a Bloomberg News survey with a median projection of a 125,000 gain. Unemployment rose to 7.9 percent.
“Jobs are expanding despite all this expression of business caution,” said Maury Harris, chief economist at UBS Securities LLC in New York. “You continue to see improvements in people’s perceptions of what’s happening in the job market.”
Private payrolls, which exclude government agencies, climbed by 184,000 last month, the most since February. They were forecast to advance by 123,000.
Revisions added a total of 84,000 jobs to the employment count in the previous two months and brought average gains since June to 173,000.
Forecasts for payrolls gains in the Bloomberg survey ranged from 30,000 to 154,000 following an initially reported 114,000 increase in September.
The unemployment rate, which rose from 7.8 percent in September, matched the Bloomberg survey median. Estimates ranged from 7.7 percent to 8 percent. The figures were unaffected by Hurricane Sandy. Surveys were conducted before the storm struck.
Construction companies added 17,000 workers last month, the most since January. Factories added 13,000 people after a 14,000 decrease a month earlier, Friday’s report showed.
While employment improved last month, compensation lagged behind. Average hourly earnings climbed 1.6 percent in October from the same time last year, the smallest gain since comparable year-over-year records began in 2007, the report showed. Earnings for production workers rose 1.1 percent in the 12 months to October, the weakest since records began in 1965.
The gain in payrolls so far this year has averaged 157,000 a month, little changed from the 153,000 average for 2011. Monthly employment gains in 2010 averaged 86,000.
The so-called underemployment rate — which includes part-time workers who’d prefer a full-time position and people who want work but have given up looking — decreased to 14.6 percent from 14.7 percent. Government payrolls decreased by 13,000 in October. Retailers took on 36,400 employees, the most since April 2011. Temporary hiring rose by 13,600.