REUTERS FINANCE[/color][/b][/size]
Payrolls Surge, Third Straight Rise[/size]
Fri November 07, 2003 09:13 AM ET
By Anna Willard
WASHINGTON (Reuters) - The U.S. economy added more than twice the number of jobs expected in October, the third straight monthly gain, and the jobless rate fell, the government said on Friday in a report pointing to a labor market recovery.
The Labor Department also made substantial upward revisions to payrolls for August and September, a sign sizzling economic growth in the third quarter translated into more jobs.
The number of workers on U.S. payrolls outside the farm sector in October soared 126,000, the largest rise since January, after climbing 125,000 in the previous month. The number far outstripped analyst expectations for a 58,000 gain.
The unemployment rate fell to 6.0 percent, the lowest since April, from 6.1 percent in September. That also beat economist forecasts for the jobless rate to remain unchanged.
"Obviously there were very good numbers across the board. More important, though, are the big revisions in August and September upward. Suddenly, here we are with three positive months," said Christopher Low, chief economist at FTN Financial in New York.
The dollar soared and bond prices slumped after the data.
President Bush, facing a re-election campaign in 2004, will likely welcome the numbers as a defense against political opponents who charge he has not done enough to create jobs.
Broader economic signs have been on an upward path for several weeks.
The economy grew at a blockbuster 7.2 percent pace in the third quarter of the year. But partly due to huge productivity gains, the job market has been lagging other areas.
Speaking on Thursday after the Labor Department reported a surprisingly large drop in the number of Americans claiming jobless benefits, Federal Reserve Chairman Alan Greenspan said the chances of a job growth pick-up were rising.
However, the Fed chief signaled U.S. interest rates are likely to remain low for some time. At its last policy-setting meeting on Oct. 28, the Fed kept its key federal funds target rate at a 45-year low of 1 percent and said it could hold it there for a considerable period.
A large portion of the payrolls increase came from the service sector, which added 143,000 jobs, the largest climb since January. The Labor Department said a grocery strike and lockout affecting 70,000 workers in Southern California had a net positive impact on employment.
The retail trade sector added 30,000 jobs, the education and health services sector created 56,000 jobs and professional and business services rose by 43,000.
In an encouraging sign for the months ahead, the number of hours worked increased to 33.8 in October from 33.7 in September. When companies are poised to boost hiring they often increase the hours worked by their current staff first.
Average hourly earnings also rose, rising to $15.46 from $15.45 the prior month.
Manufacturing continued to lose jobs in October, but at a slower pace than in previous months. The hard-hit sector, which has seen declines for 39 consecutive months, shed 24,000 positions in the month.[/b]
© Copyright Reuters 2003. All rights reserved. Any copying, re-publication or re-distribution of Reuters content or of any content used on this site, including by framing or similar means, is expressly prohibited without prior written consent of Reuters.
Quotes and other data are provided for your personal information only, and are not intended for trading purposes. Reuters, the members of its Group and its data providers shall not be liable for any errors or delays in the quotes or other data, or for any actions taken in reliance thereon.
