US Economy Sizzles

http://www.cbsnews.com/stories/2003/11/07/national/main582425.shtml

CBS MarketWatch) The U.S. labor market is much stronger than earlier thought, as the economy added more than a quarter million jobs over the past three months, the Labor Department said Friday.

The U.S. economy added 126,000 payroll jobs in October after a revised gain of 125,000 in September, more than double the 57,000 originally reported, the Labor Department estimated Friday.

August's 41,000-job loss was revised to a gain of 35,000.

The unemployment rate sank to 6 percent, the lowest rate since April, the department said. Total hours worked in the economy rose 0.4 percent to the highest level since January.

Economists were expecting a gain of about 56,000 in October, according to a survey conducted by CBS MarketWatch. They also expected the jobless rate to remain at 6.1 percent.

"We can finally put the nail in the coffin of the jobless recovery," said Ken Mayland, president of ClearView Economics. "We are back on a rising job track."

In Winston-Salem, N.C., President Bush sought support in a Southern state that's losing manufacturing jobs with the argument that his tax cuts, free-trade policies and worker-training proposals will ensure better days ahead.

"This administration has laid the foundation for greater prosperity and more jobs across America," Mr. Bush said.

The turnaround in the labor market had been anticipated for months, but strong productivity growth had delayed any desire on the part of businesses to hire new workers.

Economists say the economy needs to add at least 150,000 jobs a month to absorb the population growth.

"I think companies are proceeding cautiously, but they are doing it. The turnaround has begun," job consultant Bernadette Kenny told CBS News Correspondent Anthony Mason.

Policymakers seemed confident that job growth was strengthening.

Although there are risks, "the odds ... do increasingly favor a revival in job creation," said Federal Reserve Chairman Alan Greenspan in a speech Thursday. His Fed colleague, Gov. Ben Bernanke, concurred.

"I find it reasonable to expect that job growth will being to pick up in the next quarter or two," Bernanke said.

The job gains are welcome news for the Bush administration, which has been predicting strong job growth as a result of its tax cuts.

Nearly half of the 278 industries added workers in October. Most service sectors were hiring, but manufacturing industries continued to decline but at a slower pace than earlier in the year.

Services added 143,000 jobs in October. Manufacturing cut 24,000, the 39th straight monthly decline in factory jobs.

Within services, retail added 30,000, professional services add 43,000 and education and health services added 56,000. Temporary help services - seen as an earlier harbinger of permanent jobs - rose by about 17,000.

The average workweek rose by 6 minutes to 33.8 hours, the highest since March. The average workweek in manufacturing held steady at 40.5 hours, with 4.2 hours of overtime.

Average hourly earnings rose 1 cent or 0.1 percent to $15.46. Wages have risen 2.4 percent year-over-year, the lowest since 1994.