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NEW YORK (CNN/Money) -
Job growth resumed in October but came in well below economists' forecasts, due to softness in the labor market nationwide, rather than disruptions from Hurricane Katrina.
Employers added 56,000 to payrolls last month compared with a revised loss of 8,000 jobs in September, the Labor Department reported. Economists surveyed by Briefing.com were looking for 100,000 new jobs. The decline in September was the first drop in payrolls in more than two years.
The unemployment rate edged down to 5 percent from 5.1 percent in September, in part because a large number of people weren't counted as part of the labor force after the storms.
Kathleen Utgoff, the commissioner of the Bureau of Labor Statistics, said in a statement that while September's job losses were Katrina-related, the October weakness was due to softness in the labor market outside the storm-affected regions.
"Job growth in the remainder of the country appeared to be below trend in October," she said in comments prepared for an appearance before the Joint Economic Committee of Congress. She suggested the jump in energy prices after Katrina may have crimped hiring plans.
The unemployment rate among the estimated half million people still displaced by hurricanes was 33 percent last month, the department said. The rate among evacuees able to return home was 10.5 percent. The survey did not include evacuees still living in shelters or hotels.
Even with the disappointing gain in payrolls, a look at September and October combined show that the labor market has weathered recent shocks fairly well, said Anthony Chan, senior economist at JPMorgan Asset Management.
"When we exclude the effects of the recent hurricanes, we have to come away with the conclusion that despite higher energy prices and a battery of hurricanes, the job market is not doing all that bad," said Chan.
There was some positive impact from the hurricanes, though. Construction employment rose by 33,000 in the month, at least partly due to reconstruction efforts, according to Utgoff.
One concern for economists and investors, and a hope for the nation's workers, is that the report showed average hourly wage rose 8 cents, or 0.5 percent, to $16.27 in October.
That's far bigger than the 0.2 percent rise forecast by economists, and it put the average hourly wage up 2.9 percent in the last 12 months. That could feed investor concerns about inflationary pressure, even with the below-trend employment gain.
"We may want to wait for another month or so to be sure that such gains were truly reflective of a upward trend and not just a possible distortion arising from the temporary 'hurricane-related' loss of many lower-paying service sector jobs," cautioned Chan.
Still, employees apparently aren't keeping up with inflation. A jump in gasoline prices has lifted the overall Consumer Price Index, the government's key inflation index, up 4.7 percent over the 12 months ending in September.
For a look at the job market and what it means for you and the markets, click here.
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