U.S. job growth surged in October as builders, temporary agencies and other employers boosted their payrolls, in part to repair widespread hurricane damage in the Southeast, the government reported yesterday.
Employers added 337,000 non-farm payroll jobs last month, the biggest jump since March, according to the Labor Department, which also increased by 113,000 its estimates of the totals for August and September.
The unemployment rate rose slightly, to 5.5 percent last month from 5.4 percent in September, because the number of people looking for work rose faster than the number of jobs.
Even with some gains attributed to the post-hurricane reconstruction efforts, economists said the report showed job growth was spread broadly across many industries. The labor market's strength surprised many analysts who had expected businesses to put hiring plans on hold because of uncertainty over oil prices, which rose above $55 a barrel in October.
The jobs report "tells us the economy did fairly well in October . . . despite the run-up in energy prices," said Stuart G. Hoffman, chief economist for PNC Financial Services Group Inc. Moreover, he said, the growth in employment and wages "gives consumers some spending power to absorb the higher cost of energy and still have a pretty good holiday period."
However, some analysts cautioned that the pace of hiring is likely to slow after the hurricane effects fade.
"While we are encouraged by this latest spurt, we seriously question its sustainability," said Richard A. Yamarone, director of economic research at Argus Research Co. "Businesses are making do with their existing workforces and really don't need the added expense of labor, especially amid soaring energy and raw-materials prices. Many businesses have decided that the skyrocketing cost of health care and medical benefits are simply too much to handle and have decided to eliminate positions."
Stocks rallied in response to the report on expectations of solid economic growth.
The figures also cemented financial market expectations that the Federal Reserve will raise a key short-term interest rate at its policymaking meeting Wednesday to keep inflation under control.
The Labor Department figures came out after a presidential campaign in which jobs ranked among the top issues. President Bush won despite the fact, cited relentlessly by his opponent's campaign, that he was the first president since Herbert Hoover to face the voters on Election Day with fewer jobs on the nation's payrolls than when he took office.