Jobless Rate Remains Constant at 5.3%

Unemployment held steady at 5.3% last month as the economy outperformed expectations and added 233,000 jobs, the government said today in a report that showed troubles continued to exist in the industrial sector.

Analysts saw the report as convincing evidence that there will not be a recession soon and that the Federal Reserve won’t feel compelled to push down interest rates.

The Labor Department said all of the non-farm payroll growth came in the service-producing sector, with most of that coming as schools and local governments continued to add jobs for the school year.

The department revised September payroll growth downward to 201,000 from the previously reported 209,000.

The manufacturing sector, which lost a revised 88,000 jobs in September, lost an additional 13,000 in October to post its fourth consecutive monthly decline.

Underscoring the weakness in that sector was new data showing the average manufacturing workweek fell from 41.8 hours to 40.8 hours and overtime was virtually nonexistent. The auto manufacturing industry continued to struggle, losing 14,000 jobs last month.

Up at a rate higher than predictions were average hourly earnings, which rose 0.7% in October, a sign that upward pressure on wages persists. Most analysts had predicted an increase of 0.4%.

The October report showed that the labor force grew by 65 million Americans last month to 124 million and that 117.5 million of them had jobs.

While the manufacturing workweek declined, the overall workweek in the private, non-farm sector edged up by 0.1 hour in October to a seasonally adjusted 34.8 hours. The department attributed most of the decline in manufacturing hours to the strike by Boeing workers.

While local government payrolls expanded because of the school year, job growth in the health-services sector continued its steady growth, adding 33,000 jobs in October. Job growth in business services was just 1,000; employment in finance, insurance and real estate was flat or up just slightly.

Retail trade added 24,000 jobs last month while transportation and public utilities added 27,000 jobs in October and wholesale trade 6,000.