Obama boost as key monthly jobs report beats forecasts

The US economy added a better than forecast 171,000 jobs last month ahead of next week Election.

Pundits had been expecting a more modest job creation of 125,000, while data from the previous two months was revised up by an aggregated 84,000.

After dipping to an average of around 50,000 in the middle of the year, payrolls have been steadily increasing by an average of 173,000 per month over the last four months.

However, Capital Economics is unsure whether the jobs reports will have any bearing on next week's election, describing it as neither 'strong enough or weak enough'.

In reaction to the numbers, Capital's chief US economist Paul Ashworth said: 'Overall, this report is sure to be spun politically by both sides. The bottom line is that the labour market remains unusually weak, but whether it is weak enough to prevent Obama getting re-elected is anyone's guess.'

Royal London Asset Management chief economist Ian Kernohan added: 'A better than expected payrolls number continues the recent run of better economic data from the US, and should boost the Obama campaign ahead of next week’s election.  

'After the election, the market is likely to shift its focus very quickly to the fiscal cliff debate. A failure to reach a compromise here would have a detrimental effect on the economy next year.'