Monthly Unemployment Report Beats Expectations

GOP presidential candidate Mitt Romney campaigned at the Farm Bureau Center in Doswell, Va., on Thursday. Current polls have President Barack Obama and Romney neck-and-neck in the state. (Photo by Chris Maddaloni/CQ Roll Call)

Job growth in October strongly beat expectations Friday, even as the unemployment rate ticked up to 7.9 percent in the final report before next week's elections.

The government reported 171,000 net new jobs last month and revised upward the previous two months by 84,000. The unemployment rate ticked up a tenth of a point, as discouraged workers started to return to the labor force.

The report contained ammunition for both President Barack Obama and challenger Mitt Romney but mostly comes as a relief for a White House with the rate staying below 8 percent for a second straight month and allowing the president to point to strengthening job creation in the final days of the too-close-to call race.

Romney quickly noted that the unemployment rate in January 2009, as Obama took office, was 7.8 percent.

“Today’s increase in the unemployment rate is a sad reminder that the economy is at a virtual standstill,” he said. “The jobless rate is higher than it was when President Obama took office, and there are still 23 million Americans struggling for work. On Tuesday, America will make a choice between stagnation and prosperity.”

Romney economic adviser Glenn Hubbard told CNBC a vigorous recovery would be generating 250,000 to 300,000 jobs a month. “This is simply not good enough,” he said.

Hubbard said resolving uncertainty about the budget and removing the risk of tax hikes would boost the economy. He also endorsed the idea of a policy of encouraging refinancing at today’s low rates; Obama has asked Congress to approve a massive refinancing plan for the past year but Congress has not taken any action.

Alan Krueger, the chairman of the White House Council of Economic Advisers, said in a statement that the report shows the economy is "continuing to heal from the wounds inflicted by the worst downturn since the Great Depression."

He emphasized the need for Congress to extend middle-class tax cuts, pass the president's home refinancing plan and pass other piece of his jobs agenda, including aid to states to hire teachers.