Unemployment rate drops to 5.8%

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By USA Today

The resurgent labor market kept chugging in October as employers added 214,000 jobs but wage growth remained sluggish, the Labor Department said Friday.

The unemployment rate fell from 5.9% to 5.8%, lowest since July 2008..

Ahead of the report, economists surveyed by Action Economics had estimated 230,000 jobs were added last month.

Businesses added 209,000 jobs, with leisure and hospitality, professional and business services, health care and retail driving the additions. Federal, state and local governments added 5,000.

Job gains for August and September were revised up by a total 31,000. August’s count was revised to 203,000 from 180,000, reversing that month’s initially disappointing figure of 142,000, and September’s to 256,000 from 248,000.

But hourly earnings rose just three cents to $24.57 and are up just 2% over the past year, in line with the modest increases so far in the five-year-old recovery. Economists, have been looking for a pickup in wage gains to spur more consumer spending.

On the positive side, the average work week rose to 34.6 hours from 34.5 hours, which could foreshadow continued strong hiring.

And the so-called underemployment rate — which includes discouraged workers who’ve stopped looking for jobs and part-time employees who prefer full-time work as well as the unemployed – fell to 11.5% from 11.8%.

Leisure and hospitality led the job gains with 52,000 including 42,000 by restaurants and bars. Professional and business services added 37,000 jobs, while healthcare and retail each added 27,000.

Manufacturers added 15,000 jobs and construction, 12,000.

Other labor market indicators have been encouraging. Initial jobless claims, a gauge of layoffs, have continued to trend down, with the four-week average reaching a 14-year low last week. Private payroll processor ADP said businesses added 230,000 jobs in October. And a measure of service-sector employment jumped to a nine-year high last month.

Monthly job growth has averaged well over 200,000 this year, up from 194,000 in 2013, and economic growth recently has accelerated as well. The U.S. economy expanded at a 3.5% annual rate in the third quarter, capping its best six-month stretch since 2013 and shrugging off sluggish growth in the euro zone and a slowdown in China.

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