October Jobs Report: More Hiring But More Unemployment

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The Lending Circle points to the October jobs report as a sign of an economy in stasis. The Lending Circle, a division of Sunovis Financial, assists businesses and borrowers with lending needs in order to stabilize or grow. What does the latest report indicate? Though hiring increased more than expected, the unemployment rate still rose by 0.1 percent versus September. It is at nearly the same level as January 2009. An uncertain future and a looming fiscal cliff continue to keep businesses restrained in regard to hiring and wage growth.

The Lending Circle, a Division of Sunovis Financial

Wages were seen to be flat across all industries, meaning that even though slightly more people are working, they are not making any more money than previously.

The October jobs report surprised many with a strong showing in hiring, yet the unemployment rate still advanced slightly higher. The U.S. Labor Department report showed that the economy added 171,000 jobs in October, while the unemployment number rose slightly to 7.9 percent versus a 7.8 percent reading in September.

The number of new hires was a positive surprise to economists, who expected the economy to add 125,000 jobs. Adding to the positive report was an upward revision in the August and September reports. The Labor Department revisions added a combined 84,000 more jobs in those two months than previously thought.

The slight rise in unemployment was unsurprising to economists, who believe that the drop in September has prodded many out of work individuals to reenter the work force. Job gains in October were spread across industries, with the private sector seeing an additional 184,000 people on the payrolls. Contributing to the rise were business and professional services, with an additional 51,000 employees, health care with 31,000 employees, and construction with 17,000 employees.

What does this mean for business? Access to capital is still tight, and depending on the industry, there is general uncertainty for the future. For businesses who need capital for new equipment, refinancing, inventory or working capital, The Lending Circle can help, even in this difficult economic period. The Lending Circle works with conventional and alternative lenders, and has added a new short-term business loan to its inventory that focuses on the business profile instead of credit scores.

As the U.S. struggles to recover from the Great Recession, nearly 12.3 million people remain unemployed, over 40 percent of them for longer than 6 months. Government employment dampened the October job numbers slightly as it shed some 13,000 jobs in October.

Manufacturing registered flat, while mining had a shortfall of 9,000 jobs. Wages were seen to be flat across all industries, meaning that even though more people are working, they are not making any more money than previously.

Once again, economists noted that the looming fiscal cliff in America is restraining potential economic growth. Current jobs growth is not sufficient to pull the U.S. out of the unemployment conundrum as companies remain uncertain and choose not to add to their payrolls.

"The broader economy is still just limping along," said Bill Dunkelberg, chief economist for the National Federation of Independent Business. "We don't really see any major pickup in job growth."

About The Lending Circle
The Lending Circle, a division of Sunovis Financial, works to address the great pent-up need for financing nationwide, and assists borrowers with all types of financing.

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Kathy Heshelow
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