Today, the U.S. Department of Labor announced that non farm payrolls increased by 151,000 in the month of October, the first increase since May of 2010. That number was reached by subtracting 8,000 cut government jobs from 159,000 private sector acquisitions.
In addition, the government revised figures from August and September to show that the economy lost 110,000 fewer jobs.
Analysts largely predicted the non farm payroll numbers to rise by only 60,000 total, with 75,000 private jobs gained and 15,000 government jobs cut. In this case, both figures exceeded expectations.
Nigel Gault, the chief U.S. economist at IHS Global Insight, stated that he saw the numbers as positive news for the U.S. economy. “It’s still within the realm of a moderate recovery. It’s both better than people had been looking for and it’s another nail in the coffin of a double dip.”
As a result of the positive news, the dollar rose strongly against most major currencies. So far in trading today, the dollar has gained 0.51% on the yen, to 81.14, and has climbed up 0.86% to 1.4092 on the euro. The dollar also picked up 0.14% to 1.6245 on the surging pound and 0.26% on the Canadian dollar, to just under parity.
The U.S. dollar index as a whole is up 0.57%, to 76.312.
There is no doubt that such a strong report for October is good news for the dollar and the American economy – especially after the Federal Reserve’s announcement of a new stimulus purchase program on Wednesday. Still, though, the unemployment rate remains stubbornly fixed at 9.6% – a figure that must decline if any real, substantial gains are to persist.
Analysts also view the good news and upward pressure for the dollar as temporary, citing the inability of the report to reverse the downward pressure created by the Fed’s announcement in the long term.
President Obama agreed, stating that while the report was “encouraging”, it is ultimately not enough. “The fact is, an encouraging jobs report doesn’t make a difference if you are still one of the millions of people who are looking for work.”
To improve the unemployment rate and provide substantial, long-term benefit for the economy, analysts estimate an average of 125,000 jobs per month need to be created to begin lowering the unemployment rate from its lofty perch.
This month’s report could initiate a trend that could help to accomplish that feat.