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U.S. economy adds 171K jobs, unemployment rate rises to 7.9 percent

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By Thomas Olson
Friday, Nov. 2, 2012, 9:24 a.m.
 

The last jobs report before Tuesday's presidential election contained good news and bad news, and the candidates and their supporters trumpeted both: Employers added 171,000 jobs in October, but the unemployment rate rose to 7.9 percent.

The jobless rate was above September's 7.8 percent, said the Bureau of Labor Statistics report, which also showed 170,000 more people were out of work in October, about the same number as were hired.

Republican Mitt Romney's camp pounced on the jobless report.

“Today's report is just another stark reminder of what is at stake in this election. President Obama failed to keep his promises and has no plan to grow our economy,” said Pennsylvania GOP Chairman Rob Gleason in a statement.

“Mitt Romney is the only candidate with the experience to create jobs and get our economy moving again,” said Gleason.

President Obama's team touted the job creation number.

“While more work remains to be done, today's employment report provides further evidence that the economy is continuing to heal from the wounds inflicted by the worst downturn since the Great Depression,” said Alan Krueger, chairman of the president's Council of Economic Advisers.

“It is critical that we continue the policies that are building an economy that works for the middle class as we dig our way out of the deep hole that was caused by the severe recession that began in December 2007,” said Krueger.

The latest game of spin-the-numbers follows accusations that flowed after September's jobs report, which reflected gains that led some to suggest the government bureau fudged the numbers.

“Some people suspected the numbers were manipulated in September, but you can't say that this month,” said Stuart Hoffman, chief economist at PNC Financial Services Group in Pittsburgh. “This was not a great report for October, but a good report. It was a continuation of gradual improvement in the job market.”

The economy has added jobs for 25 straight months. The bureau also revised August and September jobs data, which show 84,000 more jobs were created than initially estimated.

But James Sherk, a labor economist at the Heritage Foundation, a conservative think tank, said post-recession job growth should be stronger.

“If the economy continues to add jobs at this pace, it would not be until mid-2017 that unemployment would come down to 5.5 percent,” which economists generally consider “full employment,” Sherk said.

Another positive aspect, however, was that October job growth was “broadly based,” said Hoffman. “Even construction jobs finally rose (by 17,000), showing improvement in the housing market is finally gaining some traction.

“Businesses across a whole range of industries have carefully added jobs,” he said.

Professional and business services added 51,000 jobs last month, according to a survey of employers. Health care added 31,000, and retail added 36,000.

Manufacturing added just 13,000 jobs. The sector's performance “lagged the rest of the economy's despite widespread claims of an American industrial renaissance,” said the U.S. Business and Industry Council in a statement.

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

One reason the jobless rate ticked up was that the labor force — those working plus those actively seeking work — grew by 578,000 last month, according to a survey of households. The effect was to increase the jobless ratio, even while indicating a positive turn in the economy, experts said.

“With somewhat better confidence in the economy, more people came back out to look for work because they think they have decent prospects for finding a job,” said Kenneth Mayland, economist at Clearview Economics in Pepper Pike, Ohio.

Higher consumer confidence also was reflected in a higher “labor participation rate,” which is the ratio of adults in the workforce. The rate increased to 63.8 percent last month, up from 63.6 percent in September.

“But it's not like we're seeing any kind of breakout in economic growth,” said Mayland.

Thomas Olson is a staff writerfor Trib Total Media. He can be reached at 412-320-7854or tolson@tribweb.com.

 

 
 


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