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U.S. Job Creation Falls Short of Expectations

The U.S. economy added 261,000 jobs in October and the unemployment rate was 4.1% as labour conditions returned to normal following the storm-weakened September.

But, the number was considerably below Wall Street expectations of 310,000. The tick lower in the unemployment rate came against expectations it would hold steady at 4.2%

A broader measure of joblessness that includes discouraged workers and those at work part-time for economic reasons fell sharply, from 8.3% to 7.9% after being at 9.5% just a year ago.

In addition to the October growth, an initially reported decline of 33,000 for September was revised up to 18,000. August's count also was revised up from 169,000 to 208,000.

The report comes as the Federal Reserve is expected to hike its benchmark rate another quarter point in December. However, the central bank has been wary over the lack of inflation, particularly in the average hourly earnings component of the non-farm payrolls count.

Wage growth again disappointed, with earnings actually off by one cent an hour and showing just a 2.4% annualized gain.

It appears the biggest gain in employment came from the hospitality industry, with jobs at food and drinking establishments up by 89,000, reflecting a storm-related rebound. Professional and business services contributed 50,000 to the total while manufacturing added 24,000 and health-care increased by 22,000.