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Only 80,000 jobs added in Oct. but unemployment rate drops via USA Today

Posted by JC Plus 1, Inc. on November 4, 2011

Job seekers speak with employers at the New York Career Fair at a midtown Holiday Inn Oct. 24, 2011.

By Spencer Platt, Getty Images

(Job seekers speak with employers at the New York Career Fair at a midtown Holiday Inn Oct. 24, 2011)

WASHINGTON – Employers added 80,000 jobs in October, slightly less than expected, as gains in professional and business services, leisure and hospitality and healthcare were partly offset by continuing job cuts at state and local governments, the Labor Department said Friday.
 

“The case for better payrolls in the not too distant future is building,” Ian Shepardson, chief U.S. economist at high frequency economics, said in a research note.

Most encouraging was a 102,000 upward revision to employment gains in August and September. The August estimate was revised to 104,000 from 57,000 and September’s was revised to 158,000 from 103,000.

In October, private employers added 104,000 jobs while budget-strapped governments cut 24,000. The total 80,000 additions were less than the 95,000 that economists expected.

Those totals are calculated from a survey of 400,000 businesses that typically doesn’t capture a representative share of small businesses and startup firms, says economist Conrad DeQuadros of RDQ Economics. That partly explains the sharp upward revisions in recent months, he says.

By contrast, a survey of 60,000 households that determines the national unemployment rate is considered more volatile on a month-to-month basis. But it samples a broader swath of the job market and is deemed reliable over several months.

For October, that survey showed a 277,000 increase in the number of Americans employed — which explains why the jobless rate edged down despite a 181,000 increase in the labor force. Employment gains in the household survey have averaged 355,000 the past three months, likely indicating that stronger job gains are ahead, DeQuadros says.

He estimates monthly payroll increases will average about 150,000 in 2012, up from 125,000 so far this year. Gains typically must average well over 150,000 to bring down unemployment significantly

“We’re moving in the right direction,” says Wells Fargo economist Mark Vitner. “We’re not moving as fast as people would like.”

Still, he says the report, along with recent better-than-expected data on economic growth and consumer spending, should further ease worries that the U.S. might be slipping into another recession.

There were several other positive signs in the survey. The number of temporary workers rose by 15,000 in October and has increased for several months. Hiring contingent workers typically preceeds the addition of permanent employees.

Also a broader measure of underemployment that includes part-time workers who prefer full-time work and discouraged Americans who stopped looking for jobs fell to 16.2% from 16.5%. And the number of unemployed people out of work at least six months dropped by 366,000.

The average workweek held steady at 34.3 hours while average hourly earnings increased to $23.19 from $23.14.

Professional and business services added 32,000 jobs last month and have added 562,000 the past year. Other gains included 22,000 in leisure and hospitality, 12,000 in healthcare, 18,000 in retail and 5,000 in manufacturing.

But construction firms cut 20,000 jobs, offsetting gains in September. And state governments cut 20,000 jobs.

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