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This is MORNING EDITION from NPR News. I'm David Greene.
RENEE MONTAGNE, HOST:
And I'm Renee Montagne. A surprising report this morning on U.S. job growth from the Labor Department. Despite the turmoil caused by the government shutdown in October, jobs were created at a faster pace last month. More than 200,000 jobs were added to economy. Still, the shutdown probably did contribute to a rise in the unemployment rate up to 7.3 percent. NPR's John Ydstie joins us to sort it all out. Good morning.
JOHN YDSTIE, BYLINE: Hi, Renee.
MONTAGNE: Now, it was expected that job growth would be somewhat lower in this report. What happened?
YDSTIE: Well, you're right. Economists had expected about 125,000 new jobs would be created. It turns out to be 204,000 jobs were added in October. Now, we knew that in the survey of businesses that produces that job creation number, that furloughed government employees would actually be counted as employed in October. But economists thought some private sector contractors who were temporarily laid off might be counted as unemployed, but it turns out that if that was the case, it was overwhelmed by job growth in other areas. So we got a better than expected number. In the report this morning, the Bureau of Labor Statistics said the government shutdown appeared to have no discernible impact on this job growth number.
MONTAGNE: So that's job growth. What about the unemployment rate? Why did that rise, as I just said, to 7.3 percent if the job growth accelerated in October?
YDSTIE: Well, that likely is an aberration caused by the government shutdown. And here's why. The unemployment rate is calculated from a separate survey of households. It has a different methodology than the survey of businesses that produces the job growth number. While the business survey counted furloughed government workers as employed, the household survey considered them out of work, unemployed. And it showed a loss of over 700,000 jobs. So the unemployment rate rose.
Now, it's unlikely to go back down when we get the November employment report because government workers will be counted as employed once again in the household survey.
MONTAGNE: I mean essentially(ph) they were never unemployed in the long term. Okay, so where did the growth in jobs come from in October? Or what were those jobs?
YDSTIE: Well, the big gainers were the leisure and hospitality industry with 53,000 new jobs, and retail with 44,000. But construction also added 21,000 jobs and manufacturing employment rose 19,000.
MONTAGNE: What does all of this, adding it all up, tell us about the health of the economy right now?
YDSTIE: Well, it's just - the economy may be a bit stronger than we had thought, and that's evident in upward revisions in job growth numbers for August and September in this report. Those revisions put average job growth for the past three months above 200,000. That's even a bit higher than the average for the past year. But even though this is a surprisingly good report, there have been some signs that the final three months of the year may see some slowing. A report just yesterday suggested consumer spending is weakening, and another report on first-time claims for unemployment benefits last week suggested a weaker labor market than we're getting from today's report. In any case, I think the Federal Reserve will need to see another strong report on unemployment in November before it starts to signal that it's ready to consider once again pulling back its big stimulus program.
MONTAGNE: NPR economics correspondent John Ydstie. Thanks very much.
YDSTIE: You're welcome, Renee. Transcript provided by NPR, Copyright NPR.