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U.S. unemployment rate rises despite job gains

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U.S. employers added 171,000 jobs in October, and hiring was stronger in August and September than first thought, but the unemployment rate rose to 7.9 percent leading into Tuesday's elections.

President Barack Obama will face voters with the highest unemployment rate of any incumbent since Franklin Roosevelt. The rate is slightly higher than the 7.8 percent on Obama's Inauguration Day.

The job growth numbers show an economy that is strengthening slowly but consistently.

The unemployment rate rose to 7.9 percent from 7.8 percent in September, mainly because more people began looking for work. The government uses a separate survey to calculate the unemployment rate, and it counts people without jobs as unemployed only if they're looking for one. Actual unemployment is much higher.

Friday's report was the last major snapshot of the economy before the elections. It's unclear what political effect the report might have. By now, all but a few voters have made up their minds, particularly about the economy, analysts say.

Since July, the economy has created an average of 173,000 jobs a month. That's up from 67,000 a month from April through June.

The work force — the number of people either working or looking for work — rose by 578,000 in October. And 410,000 more people said they were employed.

The influx of people seeking jobs "could be a sign that people are starting to see better job prospects and so should be read as another positive aspect to the report," said Julia Coronado, an economist at BNP Paribas.

Investors seemed pleased by the news. The Dow Jones industrial average futures were flat before it came out at 8:30 a.m. When stock trading began an hour later, the Dow was up about 50 points.

The yield on the benchmark 10-year U.S. Treasury note climbed to 1.77 percent from 1.72 percent, a sign that investors were moving money out of bonds and into stocks.

Friday's report included some encouraging details.

The government revised its data to show that 84,000 more jobs were added in August and September than previously estimated. The jobs gains in October were widespread across industries. And the percentage of Americans working or looking for work rose for the second straight month.

The economy has added jobs for 25 straight months. There are now 580,000 more workers than when Obama took office.

But there were also signs of the economy's persistent weakness. Average hourly pay dipped a penny to $23.58. In the past year, pay has risen just 1.6 percent. That has trailed inflation, which rose 2 percent.

The number of unemployed increased 170,000, to 12.3 million.

The October jobs report was compiled before Superstorm Sandy struck the East Coast earlier this week and devastated many businesses.

The nascent housing recovery is finally generating jobs. Construction companies added 17,000 positions, the most since January. Manufacturers added 13,000 jobs after shedding workers in the previous two months.

Professional services such as architects and computer systems providers also added jobs. So did retailers, hotels and restaurants, and education and health care. Government overall shed 13,000 jobs, after three months of gains.

The economy has shown many signs of picking up a bit in recent weeks. Americans are buying more high-cost items, like cars and appliances. Auto companies reported steady sales gains last month despite losing three days of business to the storm in heavily populated areas of the Northeast.

Yet businesses remain nervous about the economy's future course. Many are concerned that Congress will fail to reach a budget deal before January. If lawmakers can't strike an agreement, sharp tax increases and spending cuts will take effect next year and possibly trigger another recession.

American companies are also nervous about the economic outlook overseas. Europe's financial crisis has pushed much of that region into recession and cut into U.S. exports and corporate profits.

The number of unemployed increased 170,000, to 12.3 million, pushing up the unemployment rate.

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  • Just saying is...
    just spewing drivel. I wonder if these partisans actually recognize how ridiculous they sound.
  • Tax cuts produce jobs
    When George Bush cut taxes on the rich "the unemployment rate fell to the lowest level since World War II" Please keep this in mind when voting on Tuesday. Republicans create jobs, end of story! How did Obama do???? O yeah, unemployment .1% higher than when he took office. VOTE REPUBLICAN and get people back to work!
  • Silly partisan.
    Neither party will fix our economy because they are both committed to serving the rich who fund their campaigns. Despite campaign trail rhetoric, neither of these two empty suits will do anything to return production of tangible goods to our country because the puppet masters can get higher returns producing in third world countries.
  • Progress
    Another quarter of 2% GDP growth, steady job growth and 13,000 more manufacturing jobs. It could be better, but it takes another party to pass a jobs bill. Remember that on Tuesday!

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  1. Socialized medicine works great for white people in Scandanavia. It works well in Costa Rica for a population that is partly white and partly mestizo. I don't really see Obamacare as something aimed against whites. I think that is a Republican canard designed to elicit support from white people for republican candidates who don't care about them any more than democrats care about the non-whites they pander to with their phony maneuvers. But what is different between Costa Rica nd the Scandanavian nations on one hand and the US on the other? SIZE. Maybe the US is just too damn big. Maybe it just needs to be divided into smaller self governing pieces like when the old Holy Roman Empire was dismantled. Maybe we are always trying the same set of solutions for different kinds of people as if we were all the same. Oh-- I know-- that is liberal dogma, that we are all the same. Which is the most idiotic American notion going right back to the propaganda of 1776. All men are different and their differences are myriad and that which is different is not equal. The state which pretends men are all the same is going to force men to be the same. That is what America does here, that is what we do in our stupid overseas wars, that is how we destroy true diversity and true difference, and we are all as different groups of folks, feeling the pains of how capitalism is grinding us down into equally insignificant proletarian microconsumers with no other identity whether we like it or not. And the Marxists had this much right about the War of Independence: it was fundamentally a war of capitalist against feudal systems. America has been about big money since day one and whatever gets in the way is crushed. Health care is just another market and Obamacare, to the extent that it Rationalizes and makes more uniform a market which should actually be really different in nature and delivery from place to place-- well that will serve the interests of the biggest capitalist stakeholders in health care which is not Walmart for Gosh Sakes it is the INSURANCE INDUSTRY. CUI BONO Obamacare? The insurance industry. So republicans drop the delusion pro capitalist scales from your eyes this has almost nothing to do with race or "socialism" it has to do mostly with what the INSURANCE INDUSTRY wants to have happen in order to make their lives and profits easier.

  2. Read the article - the reason they can't justify staying is they have too many medicare/medicaid patients and the re-imbursements for transporting these patient is so low.

  3. I would not vote for Bayh if he did run. I also wouldn't vote for Pence. My guess is that Bayh does not have the stomach to oppose persons on the far left or far right. Also, outside of capitalizing on his time as U. S. Senator (and his wife's time as a board member to several companies) I don't know if he is willing to fight for anything. If people who claim to be in the middle walk away from fights with the right and left wing, what are we left with? Extremes. It's probably best for Bayh if he does not have the stomach for the fight but the result is no middle ground.

  4. JK - I meant that the results don't ring true. I also questioned the 10-year-old study because so much in the "health care system" has changed since the study was made. Moreover, it was hard to get to any overall conclusion or observation with the article. But....don't be defensive given my comments; I still think you do the best job of any journalist in the area shedding light and insight on important health care issues.

  5. Probably a good idea he doesn't run. I for one do not want someone who lives in VIRGINIA to be the governor. He gave it some thought, but he likes Virginia too much. What a name I cannot say on this site! The way these people think and operate amuses me.

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