Payroll Growth in October Better than Expected, Jobless Rate at 7.3%

Despite the partial government shutdown threatening growth, the nation's economy added 204,000 jobs in October, with prior months seeing major upward revisions, the ""Bureau of Labor Statistics"":http://www.bls.gov/ (BLS) revealed Friday in its ""Employment Situation Report"":http://www.bls.gov/news.release/empsit.htm. Economists surveyed by Bloomberg put out a median forecast of 120,000 new nonfarm payroll jobs.

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Despite the increase in jobs numbers, the unemployment rate still ticked up slightly to 7.3 percent, reflecting the number of furloughed government workers who were classified as ""unemployed on temporary layoff"" in the household survey but ├â┬ó├óÔÇÜ┬¼├àÔÇ£employed├â┬ó├óÔÇÜ┬¼├é┬Ø for the payroll survey.

Payroll gains for August and September were revised upward, increasing for August from 193,000 to 238,000 and for September from 148,000 to 163,000. Together, the revisions add up to an additional 60,000 jobs added in those two months. Over the past 12 year, growth has averaged 190,000 per month.

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The number of unemployed persons in October was slightly higher compared to December, rising about 17,000. Among those unemployed, the number who reported being on temporary layoff--most of them furloughed government employees--increased by 448,000.

The number of long-term unemployed (persons who have been jobless for 27 weeks or longer) was slightly down, rounding off to 4.1 million. That number has dropped by nearly a million people over the year, BLS reported.

The civilian labor force was down by 720,000, bringing the labor force participation rate--the labor force as a percent of the population--down nearly half a percentage point to 62.8 percent.

Discouragingly, the U-6 unemployment rate, which includes the unemployed as well as all people ""marginally attached"" to the labor force and those employed part-time for economic reasons, rose to 13.8 percent. Often overlooked, the U-6 is considered by some to show a more reliable picture of the state of employment at the moment.

October's job gains were mostly in leisure and hospitality (+53,000), retail trade (+44,000), professional and technical services (+21,000), manufacturing (+19,000), and health care (+15,000). Employment in construction and financial activities--the two sectors most directly linked to housing and mortgage finance--was little changed, BLS reported.

The average workweek for all employees on private nonfarm payrolls was 34.4 hours, unchanged from September. Average hourly earnings for all private nonfarm payroll employees were $24.10, an increase of two cents.