Hiring Pace Accelerates

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The unemployment rate held at a five-year low in October and employers added more than twice as many jobs as a month earlier, according to a survey of economists.

The jobless rate stayed at 4.6% during the month, according to a Bloomberg News survey of economists before the Labor Department’s November 3 report. Some 125,000 jobs were created, compared with 51,000 in September, the survey showed. Job growth will help recharge an economy that grew last quarter at the slowest pace in more than three years because of the battered housing market, economists said. A separate report tomorrow is forecast to show consumer spending quickened as the third quarter drew to a close.

Gross domestic product grew at an annual rate of 1.6% in the third quarter after a 2.6% pace from April through June, the Commerce Department said last week. That’s a far cry from the first quarter’s 5.6% pace and evidence of how the yearlong housing-market downturn has dogged the economy.

The slowdown allowed the Fed to keep interest rates unchanged last week for a third straight month in anticipation inflation pressures will ebb. The decline in home construction subtracted 1.12 percentage points from gross domestic product in the third quarter, the most in almost 25 years, masking an acceleration in consumer purchases. Spending grew at an annual rate of 3.1% last quarter, faster than the 2.6% pace the prior three months, the Commerce Department’s report showed.

Personal spending increased 0.2% in September after a 0.1% rise a month earlier, according to the median estimate in the Bloomberg survey before tomorrow’s report. Economists also forecast incomes to rise 0.3% for a second month. Job and income growth, higher stock prices, and the lowest gasoline prices of the year combined to push up consumer confidence in October.


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