US employment increased more than expected last month as private companies hired workers at the fastest pace since April.
Non-farm payrolls rose a solid 151,000 in October, the first increase since May, the US labour department said. A 159,000-jump in private employment more than offset an 8,000 drop in government payrolls.
The government also revised payrolls for August and September to show 110,000 fewer jobs were lost. Economists had expected payrolls to increase 60,000 last month, with private employment rising 75,000.
"So it's still within the realm of a moderate recovery. It's both better than people had been looking for and it's another nail in the coffin of a double dip," said Nigel Gault, chief US economist at IHS Global Insight in Lexington, Massachusetts.
US stock index futures rallied sharply after the data, while US Treasury debt prices slumped. The US dollar surged against the euro and yen.
October's strong jobs growth, however, failed to make a dent in the lofty unemployment rate, which remained at 9.6 per cent for a third straight month, in line with market expectations.
"We still have the unemployment rate steady so this isn't going to affect the Fed thinking too much at this point," said Sean Incremona, economist at 4Cast Ltd in New York.
Analysts say the economy needs to create at least 125,000 jobs a month to start ratcheting the high unemployment rate down so four months of solid private hiring above 100,000 monthly was encouraging.
Anger over unemployment helped the Republican Party to wrest control of the House of Representatives from the Democrats in Tuesday's election, which was viewed as a vote on president Barack Obama's economic policies.
Reuters