US jobs rise by 103,000

There were 103,000 more jobs in the US economy in September, according to non-farm payroll data.

Employment grew more than expected and job gains for the prior months were revised higher, according to a government report that could ease fears the economy was heading into recession.

The unemployment rate held steady at 9.1 per cent as an increase in household employment offset a rise in the participation rate.

The non farms data covers goods-producing, construction and manufacturing companies.

Part of September's relative strength reflected the return of 45,000 Verizon Communications workers who had dropped off payrolls in August due to a strike. Excluding those workers, payrolls increased by 58,000.

The tenor of the report was strengthened by revisions that showed 99,000 more jobs added in July and August than initially reported. In addition, hourly earnings rebounded and the average work week rose.

Economists had expected nonfarm employment to increase 60,000 last month and the jobless rate to hold steady at 9.1 percent.

The government's closely followed employment report was another sign that the world's largest economy was likely to skirt a recession despite weakness over the summer.

Private employment increased 137,000 last month, an acceleration from August's meager 42,000 count. But government payrolls fell 34,000 as employment at the local government level fell 35,000 and the Postal Service shed 5,000 positions.

The nation's weak labor market has posed a critical challenge for President Barack Obama, who is gearing up for a tough reelection battle in November 2012. Obama on Thursday used a news conference to press for measures to spur jobs growth that face uncertain prospects in Congress.

Recent reports on manufacturing, business spending and auto sales suggest the economy fared better in the third quarter after growing at an anemic 1.3 percent annual pace in the April-June period.

But some economists are warning Europe's debt crisis threatens to all but derail the U.S. recovery.

And while third-quarter growth is expected to top a two per cent annualized pace, that is still too slow to make a dent in the high unemployment rate.

The economy needs to grow by at least a 2.5 per cent rate, with payrolls expanding by 150,000 positions a month, to keep the jobless rate from rising.