msnbc.com news services
updated 11/5/2010 4:21:30 PM ET 2010-11-05T20:21:30

U.S. employers added a better-than-expected 151,000 jobs in October, the first monthly increase since May, but the gain was less than the 200,000 needed to start returning the 15 million unemployed Americans to work.

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Private employers hired 159,000 workers last month, the Labor Department reported Friday in its monthly employment report, about double the amount expected, while the nation’s unemployment rate remained at 9.6 percent for a third straight month.

Government at all levels shed only 8,000 jobs in October, a much better showing than September’s sharp drop. And job loss data for August and September were revised to show 110,000 fewer workers were lost than previously thought.

Giving his first reaction to the October jobs report Friday morning, President Barack Obama pointed to the fact that the country has seen several months of private-sector job growth. But he added that the economic recovery still has a long way to go.

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“The unemployment rate is still unacceptably high,” he said at a press event at the White House.

“We need to accelerate economic growth to create jobs at a faster pace,” Obama added. “I won’t be satisfied until everyone who is looking for a job can find one.”

In other economic news, consumer borrowing increased in September for the first time since January even though the category that includes credit cards dropped for a record 25th straight month.

The Federal Reserve says that consumer credit increased at an annual rate of $2.1 billion in September after having fallen at a rate of $4.9 billion in August. It was only the second increase in the past 20 months.

Americans have been reducing their borrowing for nearly two years as they try to repair their balance sheets in the wake of a steep recession and high unemployment.

Friday’s stronger-than-expected jobs report was certainly welcome news for the struggling U.S. economy, but challenges remain, cautioned Mark Zandi, chief economist at Moody’s Analytics.

“This is fantastic news, but let’s put it in context,” Zandi told CNBC Friday. “150,000 is the monthly job growth we need just to stabilize unemployment.”

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“So for context we need much stronger growth than this to keep the economy growing,” he added, noting that the still-fragile nature of the U.S. economy illustrates why the Federal Reserve felt it needed to announce Wednesday a plan to buy $600 billion in Treasury bonds.

Those purchases are intended to lower interest rates on mortgages and other loans and help boost the economy.

Since new members of the House and Senate won't take office until January, the burden of trying to energize the economy will fall initially on current members. They will meet in a so-called lame-duck session Nov. 15.

Many economists think lawmakers will extend the 2001 and 2003 tax cuts, which are scheduled to expire at the end of this year. Obama had favored letting the tax cuts lapse for the highest-earning 2 percent of taxpayers. But Republicans have pushed to make them permanent for everyone.

On Thursday, White House spokesman Robert Gibbs said Obama would be open to extending the cuts for upper-income earners for one or two years.

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The economy is likely to remain sluggish either way, and many economists see unemployment remaining above 9 percent through next year.

"Nobody is expecting rapid economic growth in the near future," said Zach Pandl, an economist at Nomura Securities. "The economy still has a lot of challenges in front of it."

That's why the Federal Reserve wants to spur more borrowing and spending, boost the economy and encourage more hiring.

"The job market remains quite weak," Fed Chairman Ben Bernanke wrote in a commentary published Thursday in the Washington Post. "A large number of people can find only part-time work, and a substantial fraction of the unemployed have been out of work six months or longer."

But the Fed's efforts likely won't do much to reduce unemployment anytime soon, economists said. That's partly because many Americans are reducing their debts — and will use the new lower interest rates toward that effort — and don't want to take out more loans. Or they don't qualify.

House of Representatives Republican leader John Boehner said Friday that the high unemployment rate shows the need for President Barack Obama to work with Republicans to extend Bush-era tax cuts and reduce federal spending.

“Any job growth is a positive sign, but stagnant and stubbornly high unemployment makes clear why permanently stopping all the looming tax hikes should top Washington’s to-do list this month,” he said in a statement.

Separately, Obama is acknowledging in the wake of this week's election rout that he hasn't been able to successfully promote his economic-rescue message to anxious Americans.

In an interview with CBS's "60 Minutes," Obama says that he "stopped paying attention" to the leadership style he displayed during his run for the presidency.

Obama also said he recognizes now that "leadership is not just legislation," and that "it's a matter of persuading people. And giving them confidence and bringing them together. And setting a tone. And making an argument that people can understand."

"And I think that — we haven't always been successful at that," he said. "And I take personal responsibility for that. And it's something that I've got to examine closely as I go forward."

The president recorded the interview, to be broadcast in full with CBS's Steve Kroft on Sunday night, before leaving on a 10-day trip to Asia.

The Associated Press and Reuters contributed to this report.

Video: Obama discusses jobs report

  1. Closed captioning of: Obama discusses jobs report

    >> we are in the middle of a tough fight to got our economy growing faster, so that businesses across our country can open and expand, so that people can find good jobs and so that we can repair the terrible damage that was done by the worse recession in our lifetimes. today we sooreceived some encouraging news. based on today's jobs report we've now seen private sector job growth for ten straight months. that means that since january the private sector has added 1.1 million jobs. let me repeat, over the course of the last several months we've seen over a million jobs added to the american economy . in october, the private sector has added 159,000 jobs. and we learned that businesses added more than 100,000 jobs in both august and september, as well. so we've now seen four months of private sector job growth above 100,000, which is the first time we've seen this kind of increase in over four years. now, that's not good enough. the unemployment rate is still unacceptably high and we've got a lot of work to do. this recession caused a great deal of hardship and put millions of people out of work. so in order to repair this damage, in order to create the jobs to meet the large need, we need to accelerate our economic growth to is a we are producing jobs at a faster pace. because the fact is, an encouraging jobs report doesn't make a difference if you're still one of the millions of people who are looking for work. and i won't be satisfied until everybody who is looking for a job can find one. so we've got to keep fighting for every job, for every new business, for every opportunity to get this economy moving. and just as we passed a small business jobs bill based on ideas of both parties and the private sector , i am open to any idea, any proposal, any way we can get the economy growing faster so the people who need work can find it faster. this includes tax breaks for small businesses like deferring taxes on new equipment so they they've got an incentive to expand and hire as well as tax cuts to make it cheaper for entrepreneurs to start economying. th the this includes building new infrastructure, from high speed trains to high speed internet so the companies can run faster and smarter. creating incentives in growth sectors like the clean energy economy. certainly includes keeping tax rates low for middle class families and extending unemployment families who are hardest hit by the downturn while generating more demand in the economy. it's also absolutely clear that one of the keys to creating jobs is to open markets to american goods made by american workers. our prosperity depends not just on consuming things but also on being the maker of things. in fact, for every $1 billion we increase in exports thousands of jobs are supposed forred here at home. that's why i've set of goal of doubling american exports over the next five years and that's why on the trip that i'm about to take i'm going to be talking about opening up additional markets in places like india, so that american businesses can sell more products abroad in order to create more jobs here at home. this is a reminder as well that the most important competition that we face will not be between democrats and republicans. it's the competition with countries around the world to lead the global economy . and our success or failure in this race will depend on whether we can come together as a nation. our future depends on putting politics aside to solve problems, to worry about the next generation instead of the next election. we can't spend the next two years mired in gridlock. other countries, like china, aren't standing still , so we can't stand still either. we've got to move forward. i'm confident if we can do that, if we can work together, then this country will not only recover but it will prosper. and i'm looking very much forward to helping to pry some markets open and help american businesses and put some people back to work here at home during the course of this trip.

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