US employers stepped up their hiring last month as the unemployment rate ticked higher as more workers restarted their hunt for work, a hopeful sign for a lackluster economy that has dragged on US President Barack Obama’s re-election chances.
Employers added 171,000 people to their payrolls last month, the US Department of Labor said yesterday. The government also said 84,000 more jobs were created in August and September than initially estimated.
The unemployment rate edged 0.1 points higher to 7.9 percent, but that was due to a surge of workers returning to the workforce. Only people who have recently looked for a job count as unemployed.
The employment data was the last major report card on the economy before Tuesday’s presidential election, which pits Obama against Republican presidential candidate Mitt Romney.
While the rise in the unemployment rate was expected, the increase in payrolls beat even the most optimistic forecast in a Reuters poll.
The report provides fodder for both candidates.
Even sustained monthly gains of 171,000 would likely bring down the unemployment rate only slowly. Even with the relative strength seen in the report, a full recovery from the 2007 to 2009 recession remains distant. The jobless rate, which peaked during the recession at 10 percent, remains about 3 percentage points above its pre-recession level.
Romney has made the nation’s feeble jobs market the centerpiece of his campaign.
The latest Reuters/Ipsos daily tracking poll showed Obama and Romney in a dead heat. Still, the political impact of the report will likely be muted as most voters perceptions of the economy are likely firmly fixed by now.
Even with a moderate pace of job creation, the US economy faces a real threat of a renewed recession next year. Without action by lawmakers, existing legislation will raise taxes and cut spending to the tune of about US$600 billion next year. That scenario — known in Washington as the “fiscal cliff” — could easily cause the economy to contract.