U.S. economy adds better-than-expected 204,000 jobs in October

PanARMENIAN.Net - The U.S. economy added a better-than-expected 204,000 jobs in October, the latest figures from the Labor Department showed, according to BBC News.

There had been fears that the 16-day shutdown of government services last month could have hit jobs growth. The monthly non-farm payroll figure is taken as a key indicator of the health of the world's biggest economy. However, the latest figures also showed that the unemployment rate edged up to 7.3% from 7.2% in September.

The Labor Department said that this was likely to be because many federal workers were counted as unemployed during the shutdown.

The report also said that employers added 60,000 more jobs in September and August than earlier estimates had suggested.

The latest figures add to a positive week for U.S. economic data.

On Thursday, Nov 7, it was announced that the U.S. economy grew at a better-than-expected annual pace of 2.8% in the third quarter.

Investors are watching closely the health of the U.S. economy, with signs of growing strength likely to raise expectations that the U.S. Federal Reserve will begin to scale back its massive economic stimulus program.

Chris Williamson, chief economist at the researchers Markit, said that the jobs figure had "defied" expectations of a slump in jobs creation due to the shutdown.

"Analysts were expecting a mere 125,000 rise," he said. "The data will add to the view that the Federal Reserve is gearing towards a tapering of its asset purchases, but policymakers will most likely wait for clearer signs that the economy is capable of growing at a faster rate than seen in recent months, hoping to see a pace of economic growth that will eat into unemployment."

In Thursday's GDP figure, the Commerce Department said that growth had been lifted by rising exports and a pick-up in construction of homes.

However, it also said that the pace of growth in consumer spending - which accounts for about two-thirds of U.S. economic activity - had slowed from the previous quarter.

Williamson said: "The jobs report follows yesterday's GDP numbers, and together the data suggest that the U.S. economy continues to expand at a reasonable pace, but that the underlying rate of expansion has cooled since earlier in the year, when policymakers began talking in earnest about scaling back monetary stimulus."