Job seekers rushed back into the marketplace last month, pushing the unemployment rate up slightly to 7.9% from September’s reading of 7.8%. Payrolls expanded by 178,000 on top of a revised increase of 148,000 in September.
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The gains were broad-based from car dealers to hospitals to factories and construction sites. This means consumers are likely to spend more freely, adding clout to the three-year economic expansion during a time when the global economy has faced increasing uncertainty.
Private payrolls increased by 184,000, the largest number since February.
The Thomson Reuters/University of Michigan consumer confidence index rose in October to the highest level since before the recession began five years ago.
The growing caveat is the upcoming fiscal cliff. If that is not averted, predictions are that consumer spending will take a large enough hit to throw the economy back into recession.
If the tax law expiration can be avoided, it is believed the current gains
can be sustained.