Washington (AFP)

The US labor market held up well in October despite the global slowdown and trade tensions, continuing to provide many new hires despite a slight recovery in the unemployment rate, due in part to the effects of the long strike at General Motors.

According to the monthly Labor Department report released Friday, the US economy created 128,000 jobs in October, a little more than expected. Analysts were betting on 125,000 job creations. The figures for August and September have also been revised up sharply by 95,000.

President Donald Trump welcomed these announcements on Twitter: "Wow, unemployment figures that are moving."

Despite this dynamism, the unemployment rate, which had reached a record low in September at 3.5%, rose a tenth of a point to 3.6%.

The 40-day strike at the Detroit General Motors automaker, the longest since the 1970s and resulting in a wage deal, is partly responsible for the rise in the jobless rate.

"In the manufacturing sector, employment has declined in the automotive and parts industry because of a strike," said the report of the Ministry of Labor.

The evolution of the unemployment rate was also disadvantaged by a paradoxical positive factor: the increase in the rate of participation in employment.

Witnessing the dynamism of activity, some 325,000 new job seekers joined the labor market in October, boosting the participation rate to 63.3%, its highest level since 2013.

Responsible for the vitality of the labor market, the services sector has created 157,000 new hires.

- Modest rise in wages -

The strike at General Motors on the other hand has dropped the manufacturing sector (-36,000), which has its largest monthly decline in staff since the recession of 2009, said a statistician of the Department of Labor.

Manufacturing activity in the United States has been in contraction for several months, as Friday again showed the ISM manufacturing index which stood at 48.3%. It's a little better than in September but still below the 50 mark, which indicates the border between contraction and expansion.

The public sector also saw its jobs fall after four months of hiring rises in the census.

But hiring has been dynamic in retail, bars and restaurants as well as in financial services.

The evolution of average hourly wages, on the other hand, disappointed. It rose only 0.2% when analysts expected + 0.3% after stagnating the month before. Over twelve months, the average hourly wage is up 3%, a little above the inflation which stood at 1.3% over one year, according to the PCE index.

These strong employment figures show that, despite the sharp downturn in the manufacturing sector, the activity of the world's largest economy is holding up better than many economists expect.

GDP growth in the third quarter, announced on Wednesday, has remained better than expected just below the 2% mark, although it has slowed since the start of the year and is now far from promises of Donald Trump to praise the expansion to more than 3%.

From July to September, growth in the United States Gross Domestic Product (GDP) grew 1.9% year-on-year after 2% in the second quarter and 3.1% in the first.

For its part, the Central Bank (Fed) has supported the economy with three rate cuts of a total of 75 basis points in the face of global slowdown and trade uncertainties.

But Wednesday after a last cut in the cost of credit, President Jerome Powell hinted that the Fed would pause in rate cuts.

The Fed "is projecting modest growth and a dynamic job market," Powell said, adding that monetary policy is now "at the right level."

Michael Pearce, economist for Capital Economics, said: "The solidity of these employment figures, as well as stronger than expected quarterly growth of 1.9%, seems to support the Fed's decision to adopt a neutral stance." on rates.

© 2019 AFP