US Businesses Boost Hiring Despite the Shutdown

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Economists differed about how October’s robust jobs report might influence the Fed. Some said it probably isn’t sufficient for the Fed to slow its $85-billion-a-month bond-buying program when it meets Dec. 17-18.

“The one month of job growth is not enough to allow them to pull the trigger,” said Patrick O’Keefe, director of economic research at CohnReznick.

But Paul Ashworth, chief U.S. economist at Capital Economics, disagreed, writing in a research note: “In our opinion, the data would justify the Fed reducing the pace of its asset purchases in December.”

The report showed that employers added an average of 202,000 jobs per month from August through October — up sharply from an average of 146,000 from May through July. And they added 45,000 more jobs in August and 15,000 more in September than the government had previously estimated.

Private businesses added 212,000 jobs last month. That was the most since February. By contrast, federal government jobs fell by 12,000.

Some consumers may spend more as the effect of tax increases that kicked in at the start of the year diminishes. In addition, banks are returning to health and may soon lend more freely. Even Europe is slowly recovering, and growth in Japan has picked up, which could boost U.S. exports.

Some companies expect a healthy holiday shopping season and are staffing up accordingly. UPS is filling 55,000 temporary jobs for the holidays.

One troubling detail in the report: The percentage of Americans working or looking for work fell to a 35-year low. But that figure was probably distorted by the shutdown.

About 800,000 government workers were furloughed for all or part of the Oct. 1-16 shutdown. Many were counted as unemployed for the purposes of calculating the unemployment rate.

But because they were ultimately paid for their time off, the furloughed workers were still counted as employed by a separate government survey that calculates job growth.

Manufacturers added 19,000 jobs in October, the most since February. Construction companies gained 11,000 jobs; retailers, 44,400; and hotels, restaurants and entertainment businesses, 53,000.

Economic growth accelerated in the July-September quarter to an annual rate of 2.8 percent, the government said Thursday. That was up from a 2.5 percent annual rate in the April-June quarter.

Some economists forecast growth will remain above 2 percent in the final three months of the year and then improve in 2014.

(Photo: AP)

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