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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. Aaron is my fav!

  2. Let's see... $25M construction cost, they get $7.5M back from federal taxpayers, they're exempt from business property tax and use tax so that's about $2.5M PER YEAR they don't have to pay, permitting fees are cut in half for such projects, IPL will give them $4K under an incentive program, and under IPL's VFIT they'll be selling the power to IPL at 20 cents / kwh, nearly triple what a gas plant gets, about $6M / year for the 150-acre combined farms, and all of which is passed on to IPL customers. No jobs will be created either other than an handful of installers for a few weeks. Now here's the fun part...the panels (from CHINA) only cost about $5M on Alibaba, so where's the rest of the $25M going? Are they marking up the price to drive up the federal rebate? Indy Airport Solar Partners II LLC is owned by local firms Johnson-Melloh Solutions and Telemon Corp. They'll gross $6M / year in triple-rate power revenue, get another $12M next year from taxpayers for this new farm, on top of the $12M they got from taxpayers this year for the first farm, and have only laid out about $10-12M in materials plus installation labor for both farms combined, and $500K / year in annual land lease for both farms (est.). Over 15 years, that's over $70M net profit on a $12M investment, all from our wallets. What a boondoggle. It's time to wise up and give Thorium Energy your serious consideration. See http://energyfromthorium.com to learn more.

  3. Markus, I don't think a $2 Billion dollar surplus qualifies as saying we are out of money. Privatization does work. The government should only do what private industry can't or won't. What is proven is that any time the government tries to do something it costs more, comes in late and usually is lower quality.

  4. Some of the licenses that were added during Daniels' administration, such as requiring waiter/waitresses to be licensed to serve alcohol, are simply a way to generate revenue. At $35/server every 3 years, the state is generating millions of dollars on the backs of people who really need/want to work.

  5. I always giggle when I read comments from people complaining that a market is "too saturated" with one thing or another. What does that even mean? If someone is able to open and sustain a new business, whether you think there is room enough for them or not, more power to them. Personally, I love visiting as many of the new local breweries as possible. You do realize that most of these establishments include a dining component and therefore are pretty similar to restaurants, right? When was the last time I heard someone say "You know, I think we have too many locally owned restaurants"? Um, never...

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