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US jobs increasing only slowly

Friday, November 02 07:28:24

The U.S. unemployment rate probably rose in October as employers stepped up hiring only slightly, underscoring President Barack Obama's vulnerability in next week's presidential election. Employers likely added 125,000 jobs to their payrolls last month, according to a Reuters survey of economists. That would be up from 114,000 in September, but would fall short of what is needed to quickly cut the jobless rate. Indeed, economists expect the unemployment rate -- a key focus in the neck-and-neck race for the White House -- to tick up by a tenth of a percentage point to 7.9 percent, reversing part of a surprise drop seen in September.

The Labor Department's closely watched report, which will be released at 8:30 a.m. (1230 GMT) today, will be the last major report card on the economy before Tuesday's presidential election, which pits President Obama against Republican Mitt Romney. If economists are right, it will show the eighth straight month of lackluster job growth, a worrisome trend that would likely reinforce the Federal Reserve's resolve to keep easy money policies in place until the economy shows more vigor. "The weakness in overall economic growth momentum has extended into the last quarter of the year," said Millan Mulraine, an economist at TD Securities in New York. Romney has made the nation's feeble jobs market, which has plagued Obama since he took office in 2009, the centerpiece of his campaign. The latest Reuters/Ipsos daily tracking poll showed Obama and Romney in a dead heat.

Still, the report could provide fodder for both candidates. Some economists have noted an increase in the jobless rate might have a silver lining if it is driven by Americans pouring into the labor market to restart job hunts. Yet barring a sharp acceleration in hiring, the report will reinforce the idea that a full recovery from the 2007-09 recession remains distant. The jobless rate, which peaked during the recession at 10 percent, remains about 3 percentage points above its pre-recession level. ( C) Reuters