U.S. Adds Jobs

The U.S. economy added 161,000 jobs in October, not a spectacular number but still a sign that the labor market continues to gain strength.

Wage growth also rose, and the nation’s unemployment rate dropped to 4.9 percent from 5 percent in September, according to data released Friday by the U.S. Department of Labor.

The number of new jobs was below expectations – economists surveyed recently by Bloomberg News said they anticipated 173,00 new jobs – but the department did increase its job creation number for August and September to a combined 44,000.

“I think that cheered up the market as much as anything,” said Jay Prag, professor of economics and finance at the Drucker School of Management at Claremont Graduate University. “I was a little disappointed because we didn’t add as many jobs as we expected to, but it’s still a solid number. There’s no sign of a recession in it.”

The U.S. economy has entered a “new normal,” in which five percent unemployment, rather than the traditional four percent, defines full employment, Prag said.

The report should not influence the results of Tuesday’s election one way or the other, Prag said.

“It wasn’t a good enough report to say the people in charge should stay in, or bad enough to say they should be thrown out,” Prag said. “I think we’re past the point where month-to-month data changes anything.”