Economy adds 80,000 jobs; unemployment falls to 9 percent

The nation’s economy added 80,000 jobs in October, the fewest in four months as job growth again fell short of expectations.

The unemployment rate nonetheless fell to 9 percent, down from 9.1 percent in September, the Labor Department reported Friday. The jobless rate has been stuck between 9 and 9.2 percent since April. 

Economists had forecast that the economy would add between 95,000 and 125,000 private-sector jobs.

The figures make it all but certain that President Obama will be saddled with high unemployment during his reelection campaign. No president since Franklin Delano Roosevelt has won reelection with an unemployment rate of 8 percent or higher.  

{mosads}The bright spot in the unemployment report was revised employment figures that showed stronger job growth in the late summer. The number of jobs added in August was revised upward from 57,000 to 104,000, and the change for September was revised from 103,000 to 158,000, a solid increase. 

Mark Zandi, chief economist for Moody’s Analytics, had predicted an addition of 100,000 jobs in total in October and said the “job market has stabilized after weakening this summer” as first-time claims for unemployment benefits have moderated.

“The economy and job market have reasonably gracefully weathered the storm from previously higher oil prices, the Japanese quake, and the political acrimony over increasing the debt ceiling,” Zandi said.  

Consumer spending — 70 percent of economic activity — helped the economy grow at a 2.5 percent rate in the third quarter, but on Wednesday, the Federal Reserve lowered its forecast for economic growth this year to no more than 1.7 percent — much lower than its forecast in June that estimated expansion for the economy between 2.7 percent and 2.9 percent. 

The unemployment rate is expected to hold for this year and drop only slightly in 2012 — falling to between 8.5 percent to 8.7 percent, the Fed said in the report. That’s up from the June projection of 7.8 percent to 8.2 percent, according to the Fed report. 

Congress and the White House are at an impasse about what step to take to alleviate the jobs crisis. The president’s $447 billions jobs bill was blocked by Republicans in the Senate, and Democrats have had no success in trying to pass the legislation in smaller chunks.

Senate Democrats tried and failed for the third time in four weeks Thursday to pass a jobs bill, as Senate Republicans rejected a $60 billion infrastructure plan. 

GOP senators were joined by one Democrat, Sen. Ben Nelson (Neb.), and Independent Sen. Joe Lieberman (Conn.) in voting against the bill. The infrastructure spending would have been paid for by a new tax on annual income earned above $1 million.

Senate Majority Leader Harry Reid (D-Nev.) chastised Republicans Friday for blocking the infrastructure bill, claiming it would have put “hundreds of thousands” of people to work.   

“Democrats will continue working to create jobs and get our economy back on track. I hope that today’s news will remind Republicans that the good of our economy and job security for the middle class are more important than protecting millionaires and Wall Street Banks,” Reid said in a statement.

Republicans, meanwhile, have been pushing legislation that they say would boost hiring by removing regulatory burdens on businesses. House Majority Leader Eric Cantor (R-Va.) has called on the president to urge Reid to “vote on the 22 bipartisan jobs bills that we have passed here in the House.”

“Just this week, the House passed four bills that the president supports, in addition to the one we passed last week,” he said in a statement. 

“House Republicans agree, ‘we can’t wait,’ which is why we continue to pass common sense legislation to help small business men and women and spur job creation for the millions who are out of work,” Cantor said, riffing off Obama’s new campaign theme. 

—Last updated at 10:00 a.m.