WASHINGTON: A burst of hiring in October added a surprisingly strong 204,000 jobs to the economy in a month when the government was partly shutdown for 16 days. And employers added far more jobs in August and September than previously thought.
The unemployment rate rose to 7.3 percent from 7.2 percent in September, the Labor Department said Friday. But that was likely because furloughed federal workers were temporarily counted as unemployed.
The surge in jobs shows the economy was stronger in October than many economists had expected. Activity at service companies and factories also accelerated last month, an earlier report showed. The figures signal that many U.S. companies shrugged off the shutdown.
“It’s amazing how resilient the economy has been in the face of numerous shocks,” said Joe LaVorgna, chief U.S. economist at Deutsche Bank.
Growth could remain healthy in coming months and perhaps pick up next year, economists say. Growing demand for homes should support construction. And auto sales are expected to stay strong.
Job growth is a major factor for the Federal Reserve in deciding when to reduce its economic stimulus. The Fed has been buying bonds each month to keep long-term interest rates low to encourage borrowing and spending.
The yield on the 10-year Treasury note surged to 2.74 percent from 2.60 percent late Thursday. That showed that some investors worry that the healthier job growth might prompt the Fed to pull back on its bond buying soon.
Economists differed about the consequences for the Fed. Some said last month’s solid hiring probably isn’t sufficient for the Fed to slow its $85-billion-a-month bond-buying program when it meets Dec. 17-18.
“The one month of job growth is not enough to allow them to pull the trigger,” says Patrick O’Keefe, director of economic research at CohnReznick. “It leaves them on hold at least for the next meeting.”
The government’s report showed that employers added an average of 202,000 jobs from August through October — up sharply from an average of 146,000 from May through July. And they added 45,000 more jobs in August and 15,000 more in September than the government had previously estimated.
Private businesses added 212,000 jobs last month. That was the most since February. By contrast, federal government jobs fell by 12,000.
Hiring also jumped in lower-paying fields. Retailers added 44,400 employees.