THE ASSOCIATED PRESS
WASHINGTON, D.C. — A burst of hiring in October added a surprisingly strong 204,000 jobs to the economy in a month when the government was partly shut down for 16 days. And employers added far more jobs in August and September than previously thought.
The unemployment rate rose to 7.3 percent from 7.2 percent in September, the Labor Department said Friday. But that was likely because furloughed federal workers were temporarily counted as unemployed.
The surge in jobs shows the economy was stronger in October than many economists had expected. Activity at service companies and factories also accelerated last month, an earlier report showed. The figures signal that many U.S. companies shrugged off the shutdown.
“It’s amazing how resilient the economy has been in the face of numerous shocks,” said Joe LaVorgna, chief U.S. economist at Deutsche Bank.
Growth could remain healthy in coming months and perhaps pick up next year, economists say. Growing demand for homes should support construction. And auto sales will likely stay strong because many Americans are buying cars after putting off big purchases since the recession struck nearly six years ago.
Job growth is a major factor for the Federal Reserve in deciding when to reduce its economic stimulus. The Fed has been buying bonds each month to keep long-term interest rates low to encourage borrowing and spending.
Stocks rose in late-morning trading as investors assessed the stronger-than-expected job growth. But the yield on the 10-year Treasury note surged to 2.74 percent from 2.60 percent late Thursday. That showed that some investors worry that the healthier job growth might prompt the Fed to pull back on its bond buying soon.
Economists differed about the consequences for the Fed. Some said last month’s solid hiring probably isn’t sufficient for the Fed to slow its $85-billion-a-month bond-buying program when it meets Dec. 17-18.