WRAPUP 5-Jump in U.S. hiring lifts spirits on economy

* Nonfarm jobs up 151,000 in October, first rise since May

* Private employment jumps 159,000, strongest since April

* Unemployment rate steady at 9.6 percent

* Average workweek, hourly earnings edge up
(Adds details, pending homes sales data; updates markets)

By Lucia Mutikani

WASHINGTON, Nov 5 (BestGrowthStock) – U.S. employment surged much
more than expected last month as private companies hired
workers at the fastest pace since April, a sign the sluggish
economy is finally starting to tick up.

Nonfarm payrolls rose a solid 151,000 in October, the first
gain since May and more than double economists’ expectations, a
Labor Department report showed on Friday. Private hiring rose
by 159,000, while the government cut only 8,000 jobs.

Concern over the anemic job market was a factor behind the
Federal Reserve’s decision this week to pump an additional $600
billion into the economy through government bond purchases to
push interest rates down and stimulate demand.

Analysts said the data was not strong enough to knock the
Fed off its new policy course, but it tempered speculation the
central bank might have to step up its bond buying.

“The report confirms the economy is regaining momentum and
provides an encouraging signal of business confidence,” said
Aaron Smith, a senior economist at Moody’s Analytics in West
Chester, Pennsylvania.

Data for August and September also was revised to show
110,000 fewer jobs were lost than previously estimated. Private
payrolls have grown above 100,000 for each of the last four
months and are now up 1.1 million since December.

The upbeat data drew a mixed reaction from U.S. financial
markets. U.S. stocks (Read more about the stock market today. ) slipped as investors pocketed profits
after shares hit a two-year high on Thursday, while the dollar
rallied and government debt prices fell as traders reined in
bets on a further easing of monetary policy.

While the department’s survey of employers found solid job
growth, a more volatile survey of households showed losses and
the unemployment rate remained stuck at a painfully high 9.6
percent for a third straight month.

A 1.8 percent drop in pending sales of previously owned
homes in September provided another reminder the economic
recovery remained fragile. [ID:nN05223796]

SNAP ANALYSIS-Services jobs back: [ID:nN05286322]

BREAKINGVIEWS-Employment starts to look at odds with

policy [ID:nN05289366]

For graphics on U.S. payrolls and unemployment, click on:





For Insider videos on the jobs report, click on:




The U.S. central bank, which cut overnight interest rates
to near zero in December 2008 and then bought about $1.7
trillion in debt to spur recovery, has been concerned about the
lofty level of unemployment and a slowing in inflation.

Economists said it was not clear yet whether the economy
was on a path that would do much to curb joblessness.

“The Fed is looking for sustained job creation of about
200,000 a month that drives the unemployment rate down in a
meaningful way,” said Neil Dutta an economist at Bank of
America Merrill Lynch in New York. “That process remains
sluggish, but the momentum might be improving.”

Anger over joblessness helped the Republican Party wrest
control of the House of Representatives from Democrats in
elections on Tuesday, which were viewed as a referendum on
President Barack Obama’s economic policies.

Obama described the data as encouraging, but said the
jobless rate was still unacceptably high. Speaking at the White
House, he renewed a call for small business tax breaks, new
infrastructure spending, aid for the unemployed and an
extension of soon-to-expire tax cuts for the middle class.

“I am open to any idea, any proposal, any way we can get
the economy growing faster so that people who need work can
find it faster,” Obama said.

House Republican leader John Boehner said tax cuts for
wealthier Americans also needed to be extended, a prospect the
White House has hinted it is open to on a temporary basis.

“Stagnant and stubbornly high unemployment makes clear why
permanently stopping all the looming tax hikes should top
Washington’s to-do list this month,” Boehner said.


Jobs growth in October was supported by the private
service-providing sector, where employment jumped by 154,000.

Temporary help services, a harbinger of permanent hiring,
increased 34,900 from 23,800 in September. Hiring at retailers,
in the health care sector and at restaurants was also strong.

But manufacturing payrolls fell 7,000 after declining 2,000
in September. Construction firms unexpectedly added 5,000
workers, helping payrolls in the goods-producing sector to rise
5,000 after falling 4,000 in September.

The average workweek increased to 34.3 hours from 34.2
hours in September, another sign economic activity was
expanding. Average hourly earnings increased five cents, which
should help to support consumer spending.

Local government payrolls, which contributed to sinking
government employment in September, fell 14,200 in October.
There was a small drag on government employment from the
departure of 5,000 workers hired temporarily to conduct the
decennial census.

Although the jobless rate held steady, a broader measure of
underemployment edged down for the first time in five months.
(Editing by Neil Stempleman)

WRAPUP 5-Jump in U.S. hiring lifts spirits on economy