WASHINGTON — Employers shrugged off a partial government shutdown in October and added a robust 204,000 non-farm jobs, the government said Friday in a much-better-than-expected report that also saw the jobless rate tick up slightly, to 7.3 percent.

Mainstream economists had expected job growth in the range of 120,000, so the October surprise was a bit of a shock. And it came a day after the Commerce Department had reported that the economy grew at a faster-than-expected annual rate of 2.8 percent from July to September.

“These job gains were certainly beyond my wildest expectations,” said Scott Anderson, the chief economist for San Francisco-based Bank of the West and an analyst who’s been less optimistic than most. “It looks like the economy gained some momentum, despite the government shutdown.”

A number so much above consensus expectations is often subject to revision the following month, but it is consistent with other recent indicators on manufacturing, services and economic growth. And within the Labor Department’s jobs report were signs that hiring was broadly spread across sectors.

In fact, the only broad sector to post declines in October was government, which shed 8,000 jobs. Absent government, private-sector payrolls grew by 212,000. And statisticians revised the August and September jobs reports upward by a combined 60,000 jobs.

Because government workers received back pay after the shutdown, they were counted as employed during the month.

Where it got more complicated, however, was in determining the unemployment rate. That’s done through a survey of households. And while the unemployment rate ticked up a tenth of a percentage point to 7.3 percent, there’s reason to think that it might actually have gone down.

That’s because a large number of respondents to the household survey, 448,000 of them, reported that they were “unemployed, on temporary layoff.” These were government workers or people who did contract work with the federal government.

“We estimate the unemployment rate was 7.0 percent excluding the impact of the shutdown,” economists for forecaster RDQ Economics said in an investment note.

“The upward revisions to job growth in August and September, combined with solid third-quarter GDP growth reported Thursday, suggest that the economy was gaining traction in the months leading up to the government shutdown,” said Jason Furman, the head of the White House Council of Economic Advisers.

The leisure and hospitality sector led hiring in October, adding 53,000 jobs. Business and pleasure travel affects this section, which suggests that companies and ordinary folks were inclined to travel and spend money last month.

The professional and business services sector, generally better-paying white-collar jobs, added 44,000 positions.

Retailers also posted a strong 44,400 new payroll jobs in October, a good sign going into the holiday season.

“Today’s report puts the U.S. economy in a very positive light heading into the fall and winter seasons,” Jack Kleinhenz, the chief economist for the National Retail Federation, said in a statement. “The government shutdown had little to no impact on the improving employment situation, which is steadily improving along with GDP. While retailers and businesses are hiring, consumers remain cautious, but we remain steadfast in our belief that consumer confidence and spending will improve.”

The latest reading of consumer confidence, however, came in subdued on Friday. The Thomson Reuters/University of Michigan index of consumer sentiment fell to its lowest level in more than two years. It suggests that while the shutdown didn’t hurt hiring, it did weigh on consumers who feared losing their jobs and likely dialed back their spending.

(0) comments

Welcome to the discussion.

Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.