US unemployment pegged at 7.9 percent

The U.S. Labor Department, in the last key economic report before the presidential election, said Friday the October unemployment rate was 7.9 percent. The rate is in line with expectations and one tick higher than September's 7.8 percent. Republican presidential challenger Mitt Romney was quick to jump on the figure. "Today's increase in the unemployment rate is a sad reminder that the economy is at a virtual standstill," Romney said in a statement. "For four years, President Obama has told us that things are getting better and that we're making progress. For too many American families, those words ring hollow." The Labor Department said 171,000 jobs were added to the economy in October and 154,000 adults stopped looking for work. The unemployment rate has dropped from a recession peak of 10 percent, but most of the gains in recent months have been from "discouraged workers" dropping out of the workforce. People who stop looking for work are no longer counted in the data, so those who don't seek jobs actually help lower the unemployment rate. On the other hand, a low unemployment rate draws discouraged workers back into the data pool and they resume searches for jobs. The 7.8 percent rate in September could have had that effect on the labor market. Thursday's ADP National Employment Report, sponsored by the payroll company and maintained by Macroeconomic Advisers LLC, beat many economists' forecasts by about 23,000 jobs, estimating 158,000 jobs were gained in October in the private sector. Economists had predicted non-farm payrolls, which comprise the federal numbers, would rise 120,000 to 125,000 jobs, after rising 114,000 in September. A month ago, some conservatives denounced September's jobs report, which lowered the unemployment rate 0.3 percentage points to the lowest level since Obama took office. They suggested the figures were changed to help Obama's re-election chances. The economy added 114,000 that month, the bureau said. Economists calculate the U.S. labor market needs to add at least 250,000 jobs a month for several years to bring the jobless rate to below 6 percent, MarketWatch reported. The last time the rate was below 6 percent was in July 2008, when it was 5.8 percent, the BLS says. The Great Recession started in December 2007 and accelerated sharply in September 2008. The rate comes from a survey of 60,000 households and the jobs-growth figure comes from a survey of 141,000 business and government agencies representing some 486,000 individual work sites, the BLS says.