Despite shutdown, businesses boost hiring
The U.S. economy may be sturdier than analysts had assumed.
Employers added a surprisingly strong 204,000 jobs in October despite the 16-day government shutdown, the Labor Department said Friday. And they did a lot more hiring in August and September than previously thought.
Not only that, but activity at service companies and factories accelerated last month.
Unemployment rose to 7.3 percent from 7.2 percent in September. But that was probably because furloughed federal workers were temporarily counted as unemployed.
“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.
Analysts say the economy might be able to sustain its improvement.
They note that job gains of recent months, combined with modest increases in pay, could encourage more spending. Growing demand for homes should support construction. Auto sales are likely to stay strong because many Americans are buying cars after putting off big purchases since the recession struck nearly six years ago.
And with the nationwide average for gasoline at $3.21 — the lowest since December 2011 — consumers have a little more money to spend. Job growth is a major factor for the Federal Reserve in deciding when to reduce its economic stimulus. The Fed has been buying bonds to keep long-term interest rates low and encourage borrowing and spending.
The Dow Jones industrial average surged 167 points to close at a record high Friday after the jobs report came out.