October Jobs Report Sure to Prompt Smiling Faces

November 7, 2003 (PLANSPONSOR.com) - The US Department of Labor's (DoL) October employment report was chock full of good news on Friday, with word that the job market had cranked out a whopping 126,000 new non-farm positions and that the jobless rate had dropped.

That was the biggest jump in jobs creation since January 2003 and followed a revised 125,000-jobs increase for September (See  Surprise! Companies Add 57,000 Jobs in September ) and a similar upward revision for August.

October’s data represented the third straight monthly jobs gain and a more convincing sign than in the past that the domestic employment market finally appears to be firming and – most importantly – creating spots for new workers. By comparison, d uring the February-July period, payroll employment had decreased by an average 85,000 jobs monthly.

According to the DoL, in October professional and business services added 43,000 jobs following an increase of 70,000 in September. Employment in health care and social assistance rose by 34,000 in October and by 255,000 over the year. Within the leisure and hospitality sector, food services and drinking places added 23,000 jobs in October, following a gain of 20,000 in September.

Not only that, but t he nation’s unemployment rate fell to 6%, from 6.1% in September. That was its lowest level since April.

The October new jobs number far outstripped the expectations of Wall Street economists participating in Reuters’ regular poll, for a 58,000 gain. The economists had also forecast that October’s jobless rate would remain unchanged.

Many market analysts don’t think Friday’s good news will necessarily prompt the US Federal Reserve to start an upward trend on interest rates. Fed officials have repeatedly signaled in recent months that they believe they can keep rates at historic lows for an extended period.