US adds 204,000 jobs in Oct, jobless rate up to 7.3%

WASHINGTON (AP) – The US economy added 204,000 jobs in October, an unexpected burst of hiring during a month in which the federal government was partially shut down for 16 days.

The Labor department said Friday that the unemployment rate rose to 7.3 percent from 7.2 percent in September, likely because furloughed federal workers were counted as unemployed. The report noted that the shutdown did not affect total jobs.

Employers also added 60,000 more jobs in the previous two months than earlier estimated.

The figures show hiring has picked up this fall. Employers added an average of 202,000 jobs from August through October, up from 146,000 from May through July. Private businesses added 212,000 jobs in October, the most since February.

“While we have to take today’s report with a grain of salt, we are impressed by the strength of the report,” said Dan Greenhaus, chief global strategist at BTIG, a brokerage firm. “Given the impact of the shutdown, we have to wait until November’s report to get a fuller picture of what’s happening this fall but we’re happy enough in the meantime.”

One troubling detail in the report: the percentage of Americans working or looking for work fell to a fresh 35-year low. But that figure may have been distorted by the shutdown, too.

About 800,000 government workers were furloughed for all or part of the shutdown, which lasted from Oct. 1 through Oct. 16. Many were counted as unemployed and on temporary layoff for purposes of the unemployment rate.

But the furloughed workers were still counted as employed by the government’s survey that counts jobs because they were ultimately paid for their time off. Federal government jobs fell only 12,000 last month.

Better-paying industries boosted job gains: Manufacturers added 19,000 jobs, the most since February. And construction firms gained 11,000 positions.

Hiring also jumped in lower-paying fields. Retailers added 44,400 employees. Hotels, restaurants and entertainment firms added 53,000 jobs.

Some earlier reports had hinted that hiring was improving. Retail stores, shipping companies, and other services firms stepped up hiring in October, according to a private survey of service firms.

And the number of people seeking unemployment benefits has fallen back to pre-recession levels after four weeks of declines. Unemployment benefit applications are a proxy for layoffs. The steady decline suggests companies are cutting fewer jobs.

Economic growth accelerated in the July-September quarter to an annual rate of 2.8 percent, the government said Thursday. That’s up from 2.5 percent in the April-June quarter.

But greater restocking by businesses drove much of the increase, a trend that may not be sustainable. Consumers and businesses both cut back on spending over the summer.