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October added half the hires needed to cut jobless rate

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WASHINGTON » The economy added 151,000 jobs last month — the best showing since April but only about half what it would take to put a noticeable dent in unemployment.

With Congress facing gridlock, some economists say it will be at least a year before companies gain enough confidence to hit the sweet spot of 300,000 new jobs a month. That’s what it would take to reduce the unemployment rate — 9.6 percent in October — by a full percentage point over a year.

"It could be another year or two," says Paul Ashworth, senior U.S. economist at Capital Economics. "Hopefully, I’m wrong and the economy catches fire, but you’d have to be a pretty brave man to predict that’s going to happen."

Moody’s Analytics economist Mark Zandi hopes "the preconditions are coming into place for much better job growth. Big companies, midsize companies are very profitable."

Zandi says those companies need to get over the shock of the recession and regain the confidence to start hiring again. That will probably take another year or so, he says. He thinks net job creation won’t consistently hit the magic 300,000-a-month mark until 2012.

 

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