U.S. employers added 214,000 jobs in October; unemployment falls to 5.8 per cent

But Americans still concerned about economy
By Christopher S. Rugaber/The Associated Press
|hrreporter.com|Last Updated: 11/07/2014

WASHINGTON (AP) — Three days after voters registered their sourness about the U.S. economy, the government says employers added a solid 214,000 jobs in October, extending the healthiest pace of hiring in eight years.

The Labor Department also says that 31,000 more jobs were added in August and September than it had previously estimated. The revised figures show that employers have added at least 200,000 jobs for nine straight months, the longest such stretch since 1995.

The burst of hiring lowered the unemployment rate to 5.8 per cent from 5.9 per cent. That is the lowest rate since July 2008.

Economic growth has accelerated this year and hiring has been robust. Yet despite the data, the economy was voters' top concern in Tuesday's elections. That suggests the improvement hasn't yet been felt by many Americans.

According to most broad measures, the economy is improving steadily and nearing full health. Yet most Americans say they remain anxious about it.

``I think there's a great deal of frustration that the economy should be doing better and that people feel they should be doing better,'' says Mark Vitner, an economist at Wells Fargo.

That view was evident in Tuesday's exit poll results. Nearly 60 per cent of voters said they thought the economy was stagnating or worsening. Only one-third saw it as improving.

Those views took hold even as employers have been adding steadily more jobs and the economy has been expanding at a healthy pace.

So why aren't Americans more cheerful?

Analysts point to several factors. Better hiring and growth have barely boosted paychecks for the vast majority of earners. Adjusted for inflation, average hourly pay rose just 0.3 per cent over the 12 months that ended in September, according to government data.

And what wage gains have occurred have benefited mainly the wealthiest. Average income grew 10 per cent from 2010 through 2013 for the wealthiest one-tenth of Americans, after adjusting for inflation, according to the Fed. For everyone else, incomes stagnated or declined.

In addition, the pickup in hiring still hasn't been enough to fully repair the recession's damage, Vitner points out. There are 2.2 million fewer people with full-time jobs than in December 2007, when the recession officially began. Over the same time, the ranks of part-time workers have grown by 2.5 million, many of whom want full-time jobs.

Further job gains may eventually reverse some of those trends.

Payroll processor ADP estimated Wednesday that private businesses added 230,000 jobs in October, the most in four months. And last month, the average number of people who applied for unemployment benefits each week reached a 14-year low.

Applications for unemployment aid reflect layoffs, so the dwindling number indicates that companies are cutting few jobs. That suggests they are confident that their customer demand will pick up.

Analysts say the economic expansion is strong enough to support the current pace of hiring. Over the past six months, the economy has grown at a 4.1 per cent annual rate.

U.S. manufacturers are expanding at the fastest pace in three years, according to a survey by the Institute for Supply Management, a trade group. A measure of new orders showed that factory output will likely continue to grow in coming months. A separate survey by the ISM found that retailers, restaurants and other service companies grew at a healthy pace last month.

Still, faltering global growth could create trouble for the U.S. economy in the months ahead. Exports fell in September, the government said this week, widening the trade deficit. That led many economists to shave their predictions of economic growth in the July-September quarter to an annual rate of three per cent or less, down from the government's initial estimate of 3.5 per cent.

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