Unemployment rate falls to five-year low

On the payroll front, job losses in manufacturing, construction and retail offset gains in professional and business services, education and health, government and elsewhere.

Factories shed 39,000 jobs in October, marking the fourth straight month of employment cuts. Construction companies got rid of 26,000 jobs, while retailers trimmed 3,500 positions.

Professional and businesses services, meanwhile, added 43,000 jobs. Education and health expanded employment by 28,000, and the government payroll swelled by 34,000.

All told the 92,000 total net jobs added in October were the fewest in a year, when the economy was suffering the blow of the Gulf Coast hurricanes.

That disappointment, however, was offset by much better job gains in the previous two months. Employers added 148,000 jobs in September, versus the 51,000 first reported. Payrolls grew by a robust 230,000 in August, stronger than the 188,000 slots previously recorded.

The 4.4 percent unemployment rate was the lowest since the spring of 2001.

The jobless rate for blacks fell to 8.6 percent last month, from 9.2 percent in September. The unemployment rate for Hispanics dropped to 4.7 percent, from 5.4 percent. The jobless rate for teenagers declined to 15.4 percent from 16.4 percent.

The drop in the overall unemployment rate surprised economists who were expecting the unemployment rate to hold steady in October or possibly edge up a notch.

The employment gains come against a backdrop of a slowing national economy.

Given these circumstances, the Federal Reserve held interest rates steady last week for the third meeting in a row but made clear that policymakers will keep a close eye out for inflation.

To fend off inflation, the central bank since June 2004 had hoisted rates 17 times, the longest string of increases in Fed history. The Fed’s goal is to slow the economy sufficiently to thwart inflation but not so much as to push it into recession.

Economic growth slowed to a 1.6 percent annual rate in the late summer, the most sluggish pace in more than three years. The housing slump was a major factor in the slowdown. Economists believe growth in the current October-to-December quarter will turn out better.

MORE FROM STOCKS & ECONOMY

Stocks & economy Section Front

Indecisive Wall Street likely to stay that way Stocks close higher after upbeat earnings Oil dips to lowest level since October Leaps of faith holding up the stock market Consumer sentiment falls to lowest in 3 months Move over, feds, as locals try stimulus too J.C. Penney's profit drops, outlook brightens Disney CEO hints at successor as profits rise Obama administration faults Senate bank bill U.S. trade gap widens more than expected Stocks & economy Section Front   Add Stocks & economy headlines to your news reader: