Employers add 204,000 jobs in October; unemployment rate rises to 7.3%

WASHINGTON -- The American job market showed a burst of life in October as employers added a healthy 204,000 jobs over the month, far exceeding analysts’ expectations that had been lowered in part by the partial federal government shutdown.

The Labor Department said Friday, however, that the unemployment rate last month edged up to 7.3% from a five-year low of 7.2% in September. Officials said there was an unusually large drop in the so-called labor force, those working or actively looking for jobs. The jobless-figure calculations were complicated by the federal shutdown that had furloughed hundreds of thousands of federal workers.

The payroll job-growth data, which are based on a separate survey of employers as opposed to households, are considered more reliable and were not affected by the 16-day government shutdown, officials said.

The statistics paint a considerably brighter picture of the labor market, which was seen as having decelerated sharply in recent months.

They also increase the odds that the Federal Reserve could start to reduce its bond-buying stimulus program next month. Fed officials had held off making the move, awaiting more evidence of a sustained improvement in the economy and job market. The government reported Thursday that economic growth in the third quarter picked up to an annual rate of 2.8%, although that was largely because of a restocking of goods by businesses.

Besides the solid job growth last month, Friday’s employment report revised up the payroll increases in September and August by a total of 60,000 jobs -- to 163,000 in September and 238,000 in August.

That means job growth in the past three months averaged 201,700 a month -- close to the average at the start of the year and slightly higher than the past 12 months.

In October, the job increases, which are seasonally adjusted, were bolstered by a surge of 44,400 net new hires in the retail industry, as stores began to gear up for the holiday season. Restaurants, hotels and others in the so-called leisure industry resumed their brisk hiring after a pause in September, adding 53,000 jobs.

Professional and business services, a sprawling category that includes high-paying technical jobs as well as low-paying janitorial work, also added 44,000 net new jobs over the month. Temporary-help payrolls, viewed as a harbinger of broader hiring, were up by just 3,300.

Healthcare employment continued its more moderate pace of hiring, bringing on 15,000 more employees last month, about half of the pace of 2012. Manufacturing added 19,000 jobs, the most since February, with automobile and housing-related producers contributing a sizable share. Construction payrolls increased by 11,000 last month.

The news on wages was less encouraging. Average hourly earnings rose just two cents last month, to $24.10, after rising by three cents in September. The average weekly hours of work for all private-sector employees, considered a leading indicator, remained at 34.4 hours.

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