Despite Jobs Added, Unemployment Rate Stuck

The October jobs report was the best in a long time. The unemployment rate remains painfully high, but employers are starting to add jobs. The Labor Department says the private sector added 159,000 last month — much more than expected.

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Good news on the job front today: The Labor Department says the private sector added 159,000 jobs in October. That's much more than expected. It's also the first time the economy has added jobs since May. Still, the nation's unemployment rate remains stuck at 9.6 percent. And that underscores just how much the economy needs to grow to heal from the damage of the recession.

NPR's Jim Zarroli reports.

JIM ZARROLI: For the Obama administration it was a bittersweet irony. The jobs report for October showed unequivocal employment growth, though it came too late to prevent huge Democratic losses in the midterms. Not only was there a big increase in private sector jobs last month, but job growth was stronger than first thought in August and September.

And presidential adviser Austan Goolsbee said the trend seems clear.

Mr. AUSTAN GOOLSBEE (Presidential Adviser): This brings the total private sector job growth for the year to over a million. But we got to keep growing and we got to keep adding jobs because it was the deepest hole in a very long time.

ZARROLI: The report said there were slight drops in government and manufacturing jobs. But there were gains in education and health service, retail and temporary jobs. Dave Forsberg is executive vice president at Utah-based marketing firm MarketStar. He says his company which has a lot of clients in technology and consumer electronics has seen a big uptick in business.

Mr. DAVE FORSBERG (Executive Vice President, MarketStar): We've actually had incredible growth this year. It's been one of our strongest years. We've hired a couple of hundred full-time, permanent people and we've hired in the neighborhood of over 1,000 part-time people.

ZARROLI: Meanwhile, a lot of temporary help firms saying they're seeing more business. Something that economists say is often a harbinger of a stronger job market. Angela Cordero of Adecco Staffing says that over the past few months, her firm has been doing more and more business.

Ms. ANGELA CORDERO (Adecco Staffing): Our customers are still cautious. They are bringing people on on a temporary basis and using that as opposed to maybe doing some perm hiring. But we are seeing perm come back.

ZARROLI: Cordero says the demand for workers has been across the board in accounting, IT, legal and engineering.

Ms. CORDERO: We certainly are not at the numbers that we were a few years ago, but we are definitely seeing an increase in business opportunities.

ZARROLI: And companies are not just hiring more. They're working their current employees a bit more. The length of the average work week ticked up and so did average hourly earnings. That, too, is often seen as an indicator of strength in the economy since a rise in wages leads to consumer spending.

Economist Ken Malin(ph) says he thinks employers are slowly growing a bit more confident about the economy.

Mr. KEN MALIN (Economist): I think that talk of double dip recession shook many businesses to their cores and so they cut back on hiring and they cut back on their intentions to spend for capital improvements for the future. Well, we've gotten past that.

ZARROLI: Malin says that for a long time employers were able to delay hiring workers because they could push their existing employees to do more. As a result, productivity rose, but payrolls fell. But Malin says at some point companies can no longer do that.

Mr. MALIN: I think that productivity rubber band has been stretched about as far as it can. So in order to get incremental increases in output, we're going to need incremental increases in the headcount.

ZARROLI: Still, if today's report contained a lot of positive news, no one is really celebrating yet. There have been false springs in the job market before now. Then, too, a gain of 150,000 jobs is barely enough to keep pace with population growth. At that rate, most economists say it will take many years before the economy can recover all the jobs it's lost since 2008.

Jim Zarroli, NPR News, New York.

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