WASHINGTON – The final major economic report before Election Day, showing employers added a solid 171,000 new jobs in October, may not change many minds, but it does suggest that whoever wins Tuesday could enjoy increased economic momentum heading into next year.
Businesses stepped up their hiring last month, and more people jumped back into the job market, signs that the economy is picking up steam even as unemployment remains high.
Job numbers expanded across a broad range of industries, including the long-depressed construction sector. That part of the economy should get a further lift in the next couple of months from rebuilding after the devastating storm that hit the Northeast this week.
What’s more, the statistics indicated that payroll growth in the past two months had been sharply higher than previously thought. Revisions in the numbers boosted optimism among economists that the nation’s job-creation machine could kick into higher gear.
The jobless rate rose to 7.9 percent from 7.8 percent in September, but that wasn’t because of swelling ranks of unemployed workers, but rather gains in the number of people returning to the labor market – a positive sign that workers may be feeling more confident about their job prospects.
The report gave both President Barack Obama and his Republican opponent, Mitt Romney, political ammunition in the fading days of the campaign.
It allowed Obama to argue that the economy has added jobs for 25 consecutive months, since September 2010, and that the private sector has added jobs for 32 consecutive months, since February 2010.
Campaigning in Hilliard, Ohio, the president said: “We’ve made real progress, but we are here today because we know we’ve got more work to do. Our fight goes on.”
The report allowed the Romney campaign, however, to argue that the unemployment rate will be higher on Election Day than it was on Inauguration Day in January 2009, when it was 7.8 percent.
“I won’t waste any time complaining about my predecessor,” Romney said at a rally in West Allis, Wis. “From Day One, I will go to work to help Americans get back to work.”
For all that, the stronger-than-expected jobs report Friday from the Labor Department isn’t likely to have a huge impact on the presidential vote.
The numbers were not eye-poppingly different from last month; the vast majority of voters already have made up their minds about the economy and more than 25 million Americans have cast their ballots, closing in on one-fifth of the likely turnout.
Nonetheless, the report, along with other recent indicators showing improvements in the housing market and consumer confidence, does suggest smoother sailing for whoever wins – though the looming possibility of a sudden increase in taxes and reduction in government spending come Jan. 1 continues to act as a drag on the economy.
“The U.S. economy is beginning to find its rhythm,” said Mark Zandi, chief economist at Moody’s Analytics.
October’s job gains don’t constitute boom times.
“It wasn’t a home-run kind of report,” said Phil Orlando, chief equity strategist at Federated Investors Inc. in New York. “I wouldn’t say the labor market is out of the woods.”
Still, the latest increases marked a continuing improvement from sluggish hiring last spring.
With 171,000 new jobs in October and upward revisions that added an additional 84,000 jobs to the August and September totals, employers have expanded their payrolls an average 173,000 a month since July. That’s strong enough to absorb new workers coming into the labor market and to bring down the jobless rate, albeit only slowly.
“Employment growth has kicked up a notch,” said Heidi Shierholz, a labor economist at the Economic Policy Institute. Still, she noted, at a pace of 170,000 new jobs a month, the economy wouldn’t return to the pre-recession unemployment rate until the end of the decade.
“We need it to kick up a lot more notches,” she said.
One reason for hope about further improvements is the housing market. After several years of depressed activity, home sales and construction are growing – and that is helping consumer confidence, which rose in October to its highest level since late 2007, as measured by the University of Michigan survey of consumers.
The improvements in home sales and building also have boosted hiring. Construction payrolls were up 17,000 last month, following smaller gains in the previous four months.