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U.S. employers add 214K jobs; rate falls to 5.8 percent

November 7, 2014

Three days after voters registered their sourness about the U.S. economy, the government said Friday that employers added a solid 214,000 jobs in October, extending the healthiest pace of hiring in eight years.

The Labor Department also said 31,000 more jobs were added in August and September than it had previously estimated. Employers have now added at least 200,000 jobs for nine straight months, the longest such stretch since 1995.

The burst of hiring lowered the unemployment rate to 5.8 percent, from 5.9 percent. It's lowest rate since July 2008.

Along with the job gains, economic growth has accelerated this year. Yet despite the improvement, voters identified economic anxiety as their top concern in Tuesday's elections. That suggests the improvement hasn't yet been felt by many Americans.

Nearly 60 percent of voters said they thought the economy was stagnating or worsening. Only one-third saw it as improving.

The picture has still improved enough that the Federal Reserve announced last month that it was ending its bond purchase program, which had been intended to lower interest rates and stimulate economic growth.

At the same time, better hiring and growth have barely boosted paychecks for the vast majority of earners. Adjusted for inflation, average hourly pay rose just 0.3 percent over the 12 months that ended in September, according to government data.

And what wage gains have occurred have benefited mainly the wealthiest. Average income grew 10 percent from 2010 through 2013 for the wealthiest one-tenth of Americans, after adjusting for inflation, according to the Fed. For everyone else, incomes stagnated or declined.

The underemployment rate—which includes part-time workers who’d prefer a full-time position and people who want to work but have given up looking—declined to 11.5 percent, from 11.8 percent.

The share of the population with jobs rose to 59.2 percent in October, the highest since July 2009, from 59 percent the prior month.

Average hourly earnings for all workers rose 0.1 percent in October from the prior month. They were up 2 percent over the past 12 months, less than the 2.1-percent median forecast. The average work week for all employees increased six minutes to 34.6 hours.

Analysts say the economic expansion remains strong enough to support the current pace of hiring. Over the past six months, the economy has grown at a 4.1-percent annual rate.

U.S. manufacturers are expanding at the fastest pace in three years, according to a survey by the Institute for Supply Management, a trade group. A measure of new orders showed that factory output will likely continue to grow in coming months. A separate survey by the ISM found that retailers, restaurants and other service companies grew at a healthy pace last month.

Home sales rose in September at their fastest rate this year, a sign that housing could pick up after a sluggish performance for most of this year.

Still, faltering global growth could create trouble for the U.S. economy in the months ahead. Exports fell in September, the government said this week, widening the trade deficit. That led many economists to shave their predictions of economic growth in the July-September quarter to an annual rate of 3 percent or less, down from the government's initial estimate of 3.5 percent.

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