US unemployment rate remains constant in Oct, nonfarm payrolls rise

 @ibtimes on November 05 2010 1:31 PM

The unemployment rate in the US remained constant for the third month in October, while nonfarm payroll employment saw the biggest monthly gain since April, according to a report by the US Labor Department.

Nonfarm payroll employment rose by 151,000 in October, while a survey by Reuters expected growth of 60,000 during the month.

Employment in the private sector rose by 159,000 over the month, the report stated, nearly double the expectations of 75,000 jobs.

Professional and business services saw a rise in temporary employment of about 35,000. Stronger temporary hiring is seen as a precursor to better full-time jobs.

However, the report said the number of people employed part-time for economic reasons fell by 318,000 in October, partially offsetting large increases in the last 2 months. These employees had been working part-time because their hours had been cut back or they were unable to find full-time employment.

Employment in manufacturing lost 7,000 jobs during the month, essentially remaining flat since May, the report said. Private employment in construction, wholesale trade, transportation and financial activities also remained constant during the month.

In general terms, the economy needs to create about 150,000 jobs a month just to keep pace with the additional numbers coming into the labour force, thereby preventing the unemployment rate from rising, Paul Ashworth, an economist at Capital Economics, said in a note.

The problem, however, is that we aren't seeing payroll growth accelerate beyond that threshold, which is why we doubt this report will be causing many Fed officials to regret their decision to launch QE2, he added.

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