Markets rallied Friday morning as the stronger-than-expected October jobs report hit the wire.

Dow Jones Industrials Average futures contract rose 48 points, or 0.4 percent, to 13,213. The S&P 500 futures added 6.3 points to 1,429.50, while the Nasdaq 100 futures advanced 4.25 points to 2,689. Crude oil recovers a touch, while gold sinks further. Yields on 10-year notes, which move inversely to prices, jumped to above 1.77 percent, from about 1.72 percent before the report came out. The dollar extended gains and Treasury prices fell.

The Labor Department said Friday employers added 171,000 people to their payrolls last month. Not only was the October monthly job growth better than the 125,000 job gains economists were expecting, but revisions were also up. September payrolls were revised to a gain of 148,000 from an initially reported 114,000, and August to 192,000 from 142,000.

Private companies accounted for all of the gains in October payrolls, adding 184,000 jobs during the month. Manufacturers added 13,000 jobs. Governments, meanwhile, shed 13,000 jobs.

The unemployment rate ticked up to 7.9 percent from 7.8 percent in September, but that was due to a surge of workers coming back into the workforce, which is a good sign. Only people who have recently looked for a job can count as unemployed.

The civilian labor force rose by 578,000 to 155.6 million in October, and the labor force participation rate edged up to 63.8 percent, from 63.6 percent in September. Total employment rose by 410,000 over the month. The employment-population ratio was essentially unchanged at 58.8 percent, following an increase of 0.4 percentage point in September.

"The latest data suggests the sharp decline in the unemployment rate last month was exaggerated but by no means a complete fluke," writes Alan Ruskin of Deutsche Bank. He points out the rise in the unemployment rate this month was mainly due to an increase in the labor force and a big 410,000 gain in the household survey.

As expected, Hurricane Sandy had no discernible effect on the employment and unemployment data for October, according to the Bureau of Labor Statistics. Household survey data collection was completed before the storm, and establishment survey data collection rates were within normal ranges nationally and for the affected areas.

The disturbing part of this report is that earnings were basically unchanged for the month. Average earnings slipped by 1 cent to $23.58 an hour, while the average workweek was unchanged for the fourth straight month at 34.4 hours in October. People can only spend what they earn, and over the past year, wages are up 1.6 percent while consumer prices are up 2 percent – below the rate of inflation.

Another bit of disappointment comes from the average length of unemployment, which ticked up to 40.2 weeks from 39.8, the highest since December 2011. It’s hard find a job after a long-term unemployment.

Friday’s report is the final read on the labor market before voters head to the polls, but it’s unlikely to change the trajectory of the race. After factoring revisions to the previous two months, the trailing three-month average of monthly jobs gains is 170,333 new jobs -- almost exactly in line with the October figure.

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