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November 2, 2007
Economy Creates 166,000 Jobs in October
This Energizer Bunny of an economy just keeps rolling along, creating 166,000 jobs last month - twice what was predicted:
The Labor Department's report, released Friday, also showed that the unemployment rate held steady at 4.7 percent for the second month in a row. It's a figure that is considered low by historical standards. Good news on jobs was slightly offset by disappointing news on wages:
Job gains were logged for professional and business services, education and health care, leisure and hospitality, and for the government. Those employment increases more than offset jobs losses in manufacturing, construction and retail — casualties of the problems plaguing the housing market.
The latest snapshot of employment conditions around the country was better than economists were anticipating. Economists were forecasting payrolls to grow in October by about half the pace seen — around 80,000. They did correctly predict the unemployment rate would be unchanged.
Still, the trend this year has been toward softer job growth. And, that is beginning to show up in wages. Of course, job creation was not the norm across the board. Some sectors like retail, housing, and manufacturing lost jobs to one degree or another.
Average hourly earnings rose to $17.58 in October, a modest 0.2 percent increase from September. Economists were forecasting a slightly larger, 0.3 percent increase. Over the past 12 months, wages were up 3.8 percent.
Wage growth supports peoples' spending, a major shaper of overall economic activity. A faltering job market can crimp wage growth. That could lessen people's appetite to spend, raising trouble for the economy.
But despite all the downward pressure on the economy coming from the mortgage and default crisis as well as high fuel costs, the economy seems determined to weather the storm and make a soft landing sometime in the second quarter of next year, according to some economists.