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Jobs up, but much work remains

Unemployment rate stuck at 9.6 percent

The economy added 151,000 jobs last month, including these happy employees hired by a clothing store in Palm Beach, Fla. The economy added 151,000 jobs last month, including these happy employees hired by a clothing store in Palm Beach, Fla. (Joe Raedle/Getty Images)
By Neil Irwin
Washington Post / November 6, 2010

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WASHINGTON — Job growth accelerated in October, but the unemployment rate held steady, the government said yesterday, the latest data pointing to an economy that is finally strengthening as the year nears its end.

Employers added a net total of 151,000 jobs last month — more than double what analysts expected, and the strongest job growth since May — the Labor Department said. That compares with a revised 41,000 jobs lost during September. Analysts had forecast a gain of 60,000 positions. The unemployment rate remained 9.6 percent.

The employment gains were concentrated in the private sector — which added 159,000 jobs — especially in service industries. The government sector was a drain on employment, shedding 8,000 positions in October.

Some of the strongest job growth was in sectors important to the Massachusetts economy. Education and health services, for example, led last month’s employment gains, adding more than 50,000 jobs. Computer systems design, a key technology service industry in the state, gained 7,500 jobs. Technology manufacturers also had small job gains.

The strength of the technology sector has helped Massachusetts recover faster than the nation as a whole. The state’s unemployment rate, 8.4 percent in September, is more than a point below the national rate. Massachusetts employers have added about 40,000 net jobs since the beginning of the year, despite shedding more than 20,000 in September. The state will report October employment and unemployment in about two weeks.

In another piece of promising news, both the national average hourly work week and average hourly earnings rose, so that weekly earnings edged up 0.6 percent, to about $780 from $776.

October was the first month since last spring to show job creation levels high enough to make, over time, a dent in the nation’s astronomical unemployment. Employers need to create about 125,000 jobs a month to keep up with population growth.

President Obama hailed the October numbers, but also noted that they mean little to the nearly one in 10 Americans searching for employment and coming up empty-handed.

“The fact is, an encouraging jobs report doesn’t make a difference if you’re still one of the millions of people who are looking for work,’’ Obama said before departing on a four-nation Asia trip, where, he said, he intends to try to “pry open markets’’ and look for other ways to strengthen the economy at home.

“We’ve got to keep fighting for every job, for every small business, for every opportunity to get this economy moving,’’ Obama said. “I am open to any idea, any proposal.’’

The president warned against partisan gridlock in the wake of this week’s midterm Republican landslide. “The most important competition we face in this new century will not be between Democrats and Republicans,’’ Obama said. “Other countries, like China, aren’t standing still, so we can’t stand still either.’’

Recent weeks have brought a string of somewhat better-than-expected economic reports, including surveys of activity in the manufacturing and service sectors. The economy has been locked in a pattern of steady expansion since the summer of 2009, but since the spring that expansion had slowed too much to bring down unemployment.

Overall economic growth was 2 percent in the July-through-September quarter, a bit below the long-term US economic trend.

But the most recent readings on the economy, including yesterday’s October jobs report, offer some hope that growth may finally accelerate as 2011 begins.

The reading on the job market comes two days after the Federal Reserve launched an effort to pump $600 billion into the economy, an action aimed at trying to break the nation out of its high-unemployment rut.

The stable overall jobless rate masked some shifts within the workforce: 254,000 people dropped out of the labor force, and the number of people reporting themselves as looking for work also fell. That may bode ill for the future, in that as the economy continues to improve, many of those who have exited the labor force probably will reenter it, which could increase the unemployment rate over the coming year.

The government sector losses were highest among state and local governments, at 14,000, excluding education.