Business Excellence Awards
Applications are now being accepted for the 14th Annual Business Excellence Awar ...
By Victoria Stilwell
By Victoria Stilwell
WASHINGTON – Payrolls in the U.S. increased more than forecast in October, a sign that employers were optimistic the world’s biggest economy would weather the effects of the federal government shutdown.
The addition of 204,000 workers followed a revised 163,000 gain in September that was larger than initially estimated, Labor Department figures showed Friday in Washington. The median forecast of 91 economists surveyed by Bloomberg called for a 120,000 advance. The jobless rate rose to 7.3 percent from an almost five-year low.
The figures indicate companies adhered to hiring plans with an outlook for stronger sales in the aftermath of the 16-day budget impasse and a debate over raising the nation’s debt ceiling. Treasuries and stock futures fell on speculation the report will prompt an earlier reduction of asset purchases by the Federal Reserve.
“The government shutdown really didn’t have a material impact on employment,” said Brian Jones, senior U.S. economist at Societe Generale in New York, whose forecast for a payroll gain of 175,000 was the highest in the Bloomberg survey. “The labor market is actually quite healthy, regardless of what people may think. The economy is doing better.”
The contract on the Standard & Poor’s 500 Index expiring in December dropped 0.3 percent to 1,739.80 at 8:51 a.m. in New York. Treasuries lost the most in two months, pushing up the yield on the 10-year Treasury note 12 basis points, or 0.12 percentage point, to 2.72 percent.
Payrolls increased at manufacturers by the most since February, retailers added about twice as many workers as the month before, and leisure and hospitality employment was the strongest in six months.
Bloomberg survey estimates ranged from increases of 50,000 to 175,000. Revisions to prior reports added a total of 60,000 jobs to overall payrolls reports in the previous two months. The report, delayed by the shutdown, was originally slated for Nov. 1.
The difference between Friday’s outcome on payrolls and the average estimate of economists surveyed by Bloomberg was 3.4 times larger than the poll’s standard deviation, or the average divergence between what each economist forecast and the mean. That was the biggest surprise since April.
The unemployment rate, derived from a separate Labor Department survey of households rather than employers, was forecast to rise to 7.3 percent from September’s 7.2 percent, according to the Bloomberg survey median. The household figures showed more Americans dropped out of the labor force.
The participation rate, which indicates the share of working-age people in the labor force, decreased to 62.8 percent, the lowest since March 1978, from 63.2 percent a month earlier.