Economy adds 204,000 jobs in October

The economy added 204,000 jobs in October — well above expectations — while the unemployment rate rose slightly to 7.3 percent, the Bureau of Labor Statistics reported Friday. 

Dismal numbers were expected after the 16-day government shutdown last month, but the economy far outperformed expectations, producing nearly double the number of jobs that were estimated.

Much stronger economic growth was evident in the addition of 60,000 total jobs in August and September. 

August figures were revised up to 238,000 from 193,000 and September saw a jump to 163,000 from 148,000. 

That has boosted the monthly average to 202,000 jobs from August through October, up from 146,000 from May through July, when jobs growth fell to 89,000, which was the lowest level since June 2012.

Economists had estimated that the government shutdown would weigh heavily on job creation last month, but the effects didn't pan out in the figures, and the report said that the fiscal impasse in Washington did not affect total jobs.

Federal government employment declined by 12,000 in October and has dropped by 94,000 over the past 12 months. 

The unemployment rate probably ticked up to 7.3 percent from 7.2 in September because federal employees were furloughed for the better part of two weeks last month and were considered unemployed.

But the report reflected a nagging problem: The number of workers looking for jobs hit another 35-year low. 

The labor force participation rate fell by 0.4 percentage points to 62.8 percent.

Meanwhile, leisure and hospitality employers added 53,000 jobs and retailers hired 44,000, above the average monthly gain of 31,000 over the prior 12 months.

Another bright spot: Manufacturers added 19,000 jobs in October, including 6,000 in motor vehicles and parts.

On Thursday, the Commerce Department reported that the economy expanded at a 2.8 percent pace in the July-September quarter, faster than estimated and better than the 2.5 percent in the second quarter. 

Still, economists have lingering concerns and have said it might take several months for the federal government to iron out economic data from the shutdown. 

Those figures are expected to be clearer by the beginning of the year, and they could show that economic growth is accelerating. 

There is an expectation that the Federal Reserve will wait until March to begin tapering its $85 billion in economic stimulus. 

— Updated at 9:14 a.m.