WRAPUP 3-US data hints at modest gains, Fed eases policy

* U.S. private sector adds 43,000 jobs in Oct

* ISM non-manufacturing index rises to 54.3

* Fed to inject an additional $600 billion
(Recasts with details, adds Fed, updates markets)

By Lucia Mutikani and Caroline Valetkevitch

WASHINGTON/NEW YORK, Nov 3 (BestGrowthStock) – U.S. data on
Wednesday showed a slow-paced economic recovery was beginning
to gain some momentum, even as the Federal Reserve launched
fresh action to spur growth and create jobs.

Private employers added more jobs than expected in October
after laying off workers the previous month, while the dominant
services sector expanded for a 10th straight month. A third
report showed orders received by domestic factories increased
in September by the largest margin in eight months.

“We are slowly moving in the right direction. Even though
we are seeing some private hiring pick up, we need businesses
to push even harder on the the accelerator, we have a long ways
to go,” said Ryan Sweet, a senior economist at Moody’s
Analytics in West Chester Pennsylvania.

Disappointment with progress toward lowering unemployment
was a factor behind the Fed’s decision on Wednesday to inject
an additional $600 billion into the economy through government
bond purchases by the the middle of next year.

The U.S. central bank, which aims to push borrowing costs
lower, had already bought about $1.7 trillion in U.S.
government debt and mortgage-linked bonds after cutting
overnight interest rates to near zero in December 2008.

Voter disenchantment over the 9.6 percent unemployment rate
saw the Republican Party seizing control of the House of
Representatives in elections on Tuesday that were viewed as a
referendum on President Barack Obama’s economic policies.

U.S. private employment: http://r.reuters.com/fyh63q

U.S. ISM services sector PMI: http://r.reuters.com/fap63q

U.S. mortgages: http://r.reuters.com/kak53q



Last month, private employers added 43,000 jobs, more than
twice as many as expected, according to payrolls processor ADP
Employer Services.

September’s job losses were revised to 2,000 from the
39,000 originally reported. For details, see [ID:nEAP103300]

Separately, the Institute for Supply Management said its
index of non-manufacturing activity rose to 54.3 last month
from 53.2 in September. A figure above 50 signals expansion.

The data had little impact on financial markets, which took
their cue from details of the Fed’s fresh monetary easing,
which lagely met expectations. [ID:nN03120542]

U.S. stocks (Read more about the stock market today. ) ended modestly higher, having rallied in recent
weeks in anticipation of more monetary stimulus. Prices for
30-year government bonds tumbled as investors who had placed
big bets on the long bond showed disappointment the central
bank would concentrate purchases in shorter maturities.

The U.S. dollar dropped against the euro, but gained versus
the yen.


“The market got what it wanted, but the question is is that
enough?” said Bill O’Neill, partner at Logic Advisors in Upper
Saddle River, New Jersey.

The recovery from the worst recession since the 1930s
cooled in the summer, but data suggests a modest improvement
could be in the cards in the fourth quarter.

The economy grew at a 2.0 percent annual pace in the third
quarter, a touch faster than the 1.7 percent rate in the
April-June period, but still below potential.

Data this week showed an acceleration in manufacturing
activity in October, allaying fears of a sharp slowdown in the
sector, which has been leading the recovery.

A separate report from the Commerce Department showed
orders for manufactured goods increased 2.1 percent in
September after being flat in August. [ID:nN29128209]

“While the pick up in services industries is not as robust
as the manufacturing sector, the combined picture certainly
points to an improvement in the pace of overall economic
activity in the fourth quarter,” said Brian Bethune, chief U.S.
financial economist at IHS Global Insight in Lexington

Signs of a slight tick up in economic activity were also
evident in domestic auto sales, which in October recorded their
fastest growth pace so far this year.

Ben Poore, who heads U.S. sales for Nissan’s luxury
Infiniti brand, said the October sales reflected a waning of
the deep uncertainty that had overshadowed the U.S. market.

The bigger-than-expected gain in private hiring suggested a
more comprehensive government report on employment due on
Friday could show a slightly larger increase in jobs in October
than the 60,000 predicted by economists polled by Reuters.
(Writing by Lucia Mutikani; additional reporting by Steve
Johnson in New York)

WRAPUP 3-US data hints at modest gains, Fed eases policy