NEW YORK (Reuters) - Employers added 171,000 people to their payrolls last month, the Labor Department said on Friday, more than the 125,000 forecast by economists. The government also said 84,000 more jobs were created in August and September than initially estimated.
But the unemployment rate rose to 7.9 percent from 7.8 percent as more workers looked for work and came back into the labor force. Only people who have recently looked for a job can count as unemployed.
The employment data was the last major report card on the economy before Tuesday’s presidential election, which pits Obama against Republican Mitt Romney.
ANDREW WILKINSON, CHIEF ECONOMIC STRATEGIST, MILLER, TABAK & CO, NEW YORK:
“It’s a very favorable report, strong in most areas, particularly retail and professional hiring. I’m encouraged by the overshoot compared to consensus and the net revision of 84,000 jobs. There were some things within the household survey that were less encouraging, but overall, I’m happier with signs of broad improvement in employment. I think this compounds the impact of the storm, would should be regenerative for the economy.”
ELLEN ZENTNER, SENIOR U.S. ECONOMIST, NOMURA SECURITIES, NEW YORK:
“These numbers look pretty good. Not only did U.S. households report more than 800,000 jobs last month, but in October they reported another 410,000, and while that narrow unemployment did not budge, it remained at 7.9 percent, the broad unemployment rate ticked down, and that’s the unemployment rate that includes discouraged workers as well, so that’s good news there.
“Both the headline for total nonfarm payrolls and private payrolls were much stronger than the market had expected and it does appear that we got upward backward revisions as well. Job growth largely continues to move sideways. If you look at the 12-month moving average, we still haven’t been able to get beyond 150,000 a month, but at least this wasn’t a report that was worse than expected, because expectations already so low.
“There was no hurricane impact, that’s a big confusion here. The survey period was closed before the impact from Hurricane Sandy, so any of those impacts will be felt in next month’s employment report.
“But it’s unclear the net effect on unemployment because you have some losers, which are just losers temporarily like construction jobs that rebound pretty quickly on the other side of the side of the storm. By the time the next payrolls survey period rolls around, construction may be up and running on reconstruction efforts that really boost jobs in that area.
KATHY JONES, FIXED-INCOME STRATEGIST AT CHARLES SCHWAB, NEW YORK:
“Good number, particularly with the upward revision to the previous month, that’s always a good sign. We saw that last time around and we’ve seen it this time. That was one of the hopeful signs last time that we’re starting to see upward revisions. It’s nice to see that trend.
“I think when you dig deeper into it, it’s still not a robust number by any means. We’re way short of where we need to be to bring down the unemployment rate to where the Fed would like to see, closer to 6 percent than 8 percent. We would need to see twice as many jobs as we’re seeing, but the direction has improved. We’ve also seen some evening out in the household survey. That’s been all over the place. We had the big shift last time, it’s come back this time.
FABIAN ELIASSON, VICE PRESIDENT CURRENCY SALES, MIZUHO CORPORATE BANK, NEW YORK:
“Obviously, these are positive numbers. Overall, employment levels are still fairly low and this will keep us more or less at the same level. But it’s favorable for the current administration ahead of the election. For currencies, I think it will ultimately be seen as risk positive.”
PETER CARDILLO, CHIEF MARKET ECONOMIST, ROCKWELL GLOBAL CAPITAL, NEW YORK:
“On the surface the numbers were much better than expected, but I suspect that if you take into consideration two months of upward revisions that means we’re averaging close to 130,000 to 140,000 in nonfarm payrolls, which is not yet sufficient to powerhouse the labor market and give a big boost to economic activity. However the number was better than expected. Again I think still insufficient for any real turnaround in the job market. I think the initial reaction is going to be mixed to positive.”
JOSEPH TREVISANI, CHIEF MARKET STRATEGIST, WORLDWIDE MARKETS, WOODCLIFF LAKE, NEW JERSEY:
“A modest manufacturing expansion may be helping the labor market regain its footing after months of poor job creation but new employment will have to double from here if it is to bring unemployment near the Chicago Federal Reserve goal of 7.0 percent when people begin returning to the hunt for work.”
“Generally it is positive — the payrolls were strong and the unemployment rate sustained most of its fall from last month and the household survey has a decent mix of rising employment. Even manufacturing was positive which is a surprise and there was a strong rebound in professional and business employment, which has been weak in the last couple of months.
Overall a positive report, although the only negatives were that the work week and earnings data were a little softer than expected. So it is not all strong. We got decent upward revisions to the last two months, so generally there is a positive picture although not everything is strong.”
“Like much of the Eastern seaboard, the President’s election prospects are battered - but have the wind firmly in their sails once again.
“Two straight months of strong employment numbers suggest that the US economy is coming good at just the right time for Obama.
“Though the headline rate of unemployment crept up, it remains below the symbolic 8.0 level - and job creation is powering ahead.
“House prices are rising and consumer confidence has finally picked itself off the floor. Both the retail and construction sectors piled on jobs in October, hinting at a return of business optimism.
“But there is continued weakness in America’s manufacturing sector, and there is still no sense of inevitability about the recovery.
“This week the President faced two major tests - one from Mother Nature, the other from the gods of economic data. He seems to have passed both comfortably.
“The polls are too close to call, but the latest employment numbers may just save one more job - the President’s.”
Americas Economics and Markets Desk