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U.S. jobs grew by 271,000 last month, the year's largest

The nation's payrolls expanded by 271,000 in October, the largest rise this year, the U.S. Labor Department reported Friday. The unemployment rate fell slightly, to 5 percent from 5.1 percent.

The nation's payrolls expanded by 271,000 in October, the largest rise this year, the U.S. Labor Department reported Friday. The unemployment rate fell slightly, to 5 percent from 5.1 percent.

Hourly earnings also rose, though the rate of increase is still not as much as in past recoveries.

Whether those numbers will be enough to get the Federal Reserve Board to raise the crucial benchmark interest rate should prompt at least two beers' worth of debate for prognosticating economists.

"This is a positive step toward liftoff this year and should keep a December rate increase on the table as a live possibility," said Tony Bedikian, managing director of global markets at Citizens Bank, predicting a rise.

On Dec. 15 and 16, the Federal Reserve Board will meet and perhaps raise the benchmark rate. That's the rate it charges banks for overnight loans - which in turn affects the cost of borrowing at banks and the interest paid on savings accounts.

During the recession, the Fed lowered the rate to nearly nothing, hoping to prompt borrowing and investing, which can lead to job growth.

Employment numbers laid out in the department's September and October reports were not that impressive. "The three-month average is 187,000," said Nariman Behravesh, chief economist at IHS, an economic analysis company. "This report cancels fears of weakness rather than exhibiting raw strength."

Among industry sectors, the report was mostly positive, with increases in construction, retail, financial activities, hospitality, and professional services, such as law and engineering. Government hiring was up, driven by more employment at the state level. Manufacturing was flat.

"Underneath the euphoria over a good topline employment number is this fact: Manufacturing hasn't gained a single net job since January," Scott Paul, president of Alliance for American Manufacturing, a trade group, said in a statement. "That's terrible news for our economy. The effects of China's industrial overcapacity can be seen in waves of layoffs in American steel, aluminum, and other manufacturing sectors."

Hourly earnings have risen 2.5 percent over the year - a positive sign, - and last month's jump was the biggest since July 2009. "In past recoveries, a 3.5 to 4.5 percent rise would have been what you would have been accustomed to," said analyst Mark Hamrick of Bankrate.com. Even so, the trend is up.

"This might encourage people to add another side dish at Thanksgiving and possibly upgrade to oyster stuffing," Hamrick said.

But he said there was still slack in the workforce.

Even education, which has been a reliable growth engine and saw more hiring overall, has not been immune to cuts. Last month, Rider University in New Jersey said it would lay off faculty, following cuts this year at Drexel and La Salle Universities.

The number of long-term unemployed rose from 2.10 million to 2.14 million in October, even as the overall number of unemployed declined.

jvonbergen@phillynews.com

215-854-2769 @JaneVonBergen

www.philly.com/jobbing