US unemployment rises to 7.9 percent; Employers add 171,000 jobs
The US unemployment rate rose slightly last month, but remained below 8 percent, as US employers added jobs for the 25th consecutive month, signs of a slow but steadily advancing recovery just days before voters head to the polls in a election that has hinged on their views of the economy.
In its last report before the election, the Labor Department estimated the unemployment rate at 7.9 percent, up from 7.8 percent in September, and employers added 171,000 jobs. In addition, the Labor Department said, the nation added about 84,000 more jobs in the September and August that previously estimated, another indication that the labor market has accelerated since the spring, when job growth nearly stalled.
Since July, the the nation has gained an average of about 170,000 jobs a month, compared to about 70,000 a month from April to June.
“There continues to be improvement in the job market, albeit a slow improvement,” said Nariman Behravesh, chief economist at IHS Global Insight, a Lexington forecasting firm. “Is the glass half empty or half full? There’s a fair amount of good news in this report and the good news is that in the US, things are start to look pretty good.”
The jobs report has been one of the most highly awaited economic indicators as the presidential election enters its final days because the candidates view the nation’s problems so differently. President Barack Obama has said the economy is moving in the right direction, albeit slowly, after the worst recession since the Great Depression, arguing that his Republican opponent, former Massachusetts Governor Mitt Romney, wants to bring back policies that led to the economic collapse.
Romney has made the nation’s economic woes a mainstay of his campaign, blaming the president for high unemployment and failed policies that hurt the nation’s ability to rebound from the financial crisis. Reince Priebus, the chairman of the Republican National Committee, outlined in a statement what is likely to be the theme coming from the Romney camp in the closing days of the campaign.
“After four years of the Obama presidency, unemployment remains painfully high, and incomes are not growing,” Priebus said early Friday. “America needs and deserves a real recovery, but Obama has proven incapable of delivering.”
But in recent weeks, there have been signs that the economy is improving. US stocks opened higher Friday on the stronger than expected job gains. The Conference Board’s Consumer Confidence Index rose to 72.2, it’s highest reading since February 2008. That remains below the 90 reading consistent with a healthy economy, but a rise over the 40.9 reading from a year ago.
The Institute for Supply Management, a private trade group, said it’s index of factory activity shows the manufacturing sector is expanding. The index edged up to 51.7 in October from 51.5 in September because of higher consumer demand.
Home prices have bottomed out in many markets and in Massachusetts, they are picking up, according to data released this week.
Businesses, however, are more uncertain than consumers and a slowdown in business spending has reflected their caution about hiring. Demand that has been fueled by China, Europe, and emerging economies has cooled and many companies are holding back hiring until government resolves uncertainties surrounding U.S. tax and budget priorities.
Robert Murphy, an economics professor at Boston College, said they’re cautious in the wake of a “very very difficult recession.”
“I think employers are reticent to start hiring until they’re positive things are on a solid footing,” he said.
Hurricane Sandy, which has left 74 people dead, could also slow economic growth in the final months of 2012.
Some of the improvement in the economy is due to steps taken by the Federal Reserve to ease interest rates, Eric S. Rosengren, president of the Federal Reserve Bank of Boston said in a Thursday night speech at Babson College in Wellesley. He said the improvement in consumer confidence and spending is at least partly due to the central banks efforts to stimulate the economy by buying billions of dollars in long-term bonds.
“Our actions are likely to spur faster economic growth than we would have had without this additional stimulus – and as you know, economic growth has been painfully slow,” he said.
Rosengren was a vocal advocate of the Fed’s bond-buying effort as a way to bring down the nation’s high unemployment rate.Bryan Bender of the Globe staff contributed to this report. Megan Woolhouse can be reached at firstname.lastname@example.org. Follow her on twitter @megwoolhouse.