US posts unexpectedly quicker job growth
Print Edition
US job growth unexpectedly accelerated in October as employers shrugged off a government shutdown, suggesting the budget standoff had a more limited impact on the economy than initially feared.
Employers added 204,000 new jobs to their payrolls last month, US Labor Department said yesterday. The unemployment rate, however, rose to 7.3 percent from September’s nearly five-year low of 7.2 percent.
The department said there had been no “discernible” impact on payrolls from the 16-day federal government shutdown, adding that it had received an above average response rate from employers to its survey.
“Clearly what transpired was businesses viewed the shutdown as a temporary phenomenon and that the economy was still growing and would continue to grow going forward,” said Russell Price, senior economist at Ameriprise Financial Services in Troy, Michigan.
The report also showed 60,000 more jobs created in September and August than previously reported, suggesting that the economy had upward momentum heading into the shutdown last month.
Economists polled by Reuters had forecast payrolls rising 125,000 in October and the jobless rate ticking up a tenth of a percentage point to 7.3 percent.
The better-than-expected rise in payrolls could lift expectations that the Federal Reserve will curtail its bond-buying program earlier than most economists were anticipating.
“We will see what happens behind the doors at the Fed but certainly there will be some reassessment of at least the possibility of a December or January tapering,” said Cameron Hinds, regional CIO at Wells Fargo Private Bank in Omaha.
October’s job gains pushed them above the 190,000 monthly average for the past 12 months, a sign of strength in the labor market. But there was some bad news as more people dropped out the labor force, pushing the participation rate to 62.8 percent, the lowest level since March 1978.
The department said the drop in the participation rate was not related to the government shutdown as furloughed government workers remained in the labor force.
The smaller survey of households from which the jobless rate is derived showed a 735,000 decline in employment.
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