Non-farm payrolls rose 151,000 in October, the first increase since May
(Reuters) — Employment in the United States increased far more than expected last month as private companies hired workers at the fastest pace since April, a sign the sluggish economy is starting to tick up.
Non-farm payrolls rose a solid 151,000 in October, the first increase since May, the Labor Department said on Friday. A 159,000-jump in private employment more than offset a 8,000 drop in government payrolls.
The government also revised payrolls for August and September to show 110,000 fewer jobs were lost.
Economists had expected payrolls to increase 60,000 last month, with private employment rising 75,000.
"So it's still within the realm of a moderate recovery. It's both better than people had been looking for and it's another nail in the coffin of a double dip," said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Mass.
U.S. stock index futures rallied sharply after the data, while U.S. Treasury debt prices slumped. The U.S. dollar surged against the euro and yen.
Concern over the anemic job market was a factor behind the Federal Reserve's decision this week to pump an additional $600 billion into the economy through government bond purchases to push interest rates down further and stimulate demand.
The U.S. central bank, which cut overnight interest rates to near zero in December 2008, had already bought about $1.7 trillion in government debt and mortgage-linked bonds.
October's strong jobs growth, however, failed to make a dent in the lofty unemployment rate, which remained at 9.6 percent for a third straight month, in line with market expectations.
"We still have the unemployment rate steady so this isn't going to affect the Fed thinking too much at this point," said Sean Incremona, economist at 4Cast Ltd in New York.
Analysts say the economy needs to create at least 125,000 jobs a month to start ratcheting the high unemployment rate down so four months of solid private hiring above 100,000 monthly was encouraging.
Anger over unemployment helped the Republican Party to wrest control of the House of Representatives from the Democrats in Tuesday's election, which was viewed as a vote on President Barack Obama's economic policies.
Activing firming
But there are early signs growth is firming somewhat, with activity in both the manufacturing and service sectors rising in October. Economists said this bodes well for employment.
Employment in October was supported by the private service-providing employment, which jumped 154,000. Temporary help services, a harbinger of permanent hiring, increased 34,900 from 23,800 in September.
But manufacturing payrolls fell 7,000 after declining 2,000 in September. Construction unexpectedly added 5,000, helping the goods-producing sector payrolls to rise 5,000 after falling 4,000 in September.
The average work week increased to 34.3 hours from 34.2 hours in September.
Local government payrolls, which contributed to sinking government employment in September, fell 14,200 in October. There was a small drag on government employment from the departure of 5,000 workers hired temporarily to conduct the decennial census.
