Unemployment Rises to 7.9%, Payrolls Rise Sharply in October

Friday, 02 Nov 2012 07:50 AM

 

  Comment  |
   Contact  |
  Print  
|  A   A  
  Copy Shortlink
U.S. employers stepped up hiring in October and the jobless rate ticked higher as more workers restarted job hunts, a hopeful sign for a lackluster economy that has dragged on President Barack Obama's reelection chances.

 

Employers added 171,000 people to their payrolls last month, the Labor Department said on Friday. The government also said 84,000 more jobs were created in August and September than initially estimated.

The jobless rate edged a tenth of a point higher to 7.9 percent, but that was due to a surge of workers back into the workforce. Only people who have recently looked for a job can count as unemployed.

The employment data was the last major report card on the economy before Tuesday's presidential election, which pits Obama against Republican Mitt Romney.

While the rise in the jobless rate was expected, the increase in payrolls beat even the most optimistic forecast in a Reuters poll.

The report provides fodder for both candidates.

Even sustained monthly gains of 171,000 would likely bring down the jobless rate only slowly. Even with the relative strength seen in the report, a full recovery from the 2007-09 recession remains distant. The jobless rate, which peaked during the recession at 10 percent, remains about 3 percentage points above its pre-recession level.

Romney has made the nation's feeble jobs market, which has plagued Obama since he took office in 2009, the centerpiece of his campaign.

The latest Reuters/Ipsos daily tracking poll showed Obama and Romney in a dead heat. Still, the political impact of the report will likely be muted as most voters perceptions on the economy are likely firmly fixed by now.

The persistently high unemployment rate makes it unlikely the Federal Reserve will lose its resolve to keep easy money policies in place until the economy shows more vigor.

 

Even with a moderate pace of job creation, the U.S. economy faces a real threat of a renewed recession next year.

Without action by lawmakers, existing legislation will raise taxes and cut spending to the tune of about $600 billion in 2013. That scenario -- known in Washington as the "fiscal cliff" -- could easily cause the economy to contract.

Europe's debt crisis, which has hit factories around the world, including those in the United States, is also weighing on the U.S. economic recovery.

In October, however, U.S. manufacturer added 13,000 jobs, snapping two straight months of decline.

Nonetheless, the Fed is expected to expand a new bond-buying program at the end of the year to compensate for the end of another stimulus program aimed at driving down borrowing costs.

Persistently weak labor market conditions led the central bank in September to launch a program to buy $40 billion worth of mortgage-backed securities every month until there is a sustained pick-up in the labor market.

"The Fed is probably not impressed with the improvement in the job market over the past couple of months," said Ryan Sweet, an economist at Moody's Analytics in West Chester, Pennsylvania.

© 2014 Thomson/Reuters. All rights reserved.

  Comment  |
   Contact  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

HHS, Corporate Partners Hit Malls to Sell Obamacare

Wednesday, 26 Nov 2014 11:44 AM

The Health and Human Services (HHS) department is launching a campaign targeting shopping malls in an effort to sell Oba . . .

Nancy Pelosi: There Are 14 Million Reasons Why Obamacare Works

Wednesday, 26 Nov 2014 11:11 AM

House Minority Leader Nancy Pelosi has ripped into Democrat Sen. Chuck Schumer for his attack on Obamacare, saying there . . .

Supreme Court Justice Ginsburg Recovering After Heart Procedure

Wednesday, 26 Nov 2014 10:46 AM

Supreme Court Justice Ruth Bader Ginsburg on Wednesday underwent a heart procedure at a Washington hospital after report . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved