Hiring sped up in October, showing a labor market that picked up a bit of steam in the waning days of the presidential campaign.

The Labor Department reported Friday that non-farm payrolls increased by 171,000 last month versus expectations of a 125,000 rise. The government also said 84,000 more jobs were created in August and September than initially estimated.

In this Thursday, Oct. 25, 2012, photo, a sign attracts job-seekers during a job fair at the Marriott Hotel in Colonie, N.Y. Mike Groll / AP file

The unemployment rate was 7.9 percent, up slightly from the 7.8 percent reported in September.

The report comes just days before voters take to the polls to choose between incumbent President Barack Obama and his challenger, the Republican former governor of Massachusetts, Mitt Romney.



The sluggish economy has been a bone of contention between the two candidates. Romney has made the nation's feeble jobs market, which has plagued Obama since he took office in 2009, the centerpiece of his campaign. The latest Reuters/Ipsos daily tracking poll showed Obama and Romney in a dead heat.

"Obviously, these are positive numbers. Overall, employment levels are still fairly low and this will keep us more or less at the same level. But it's favorable for the current administration ahead of the election," said Fabian Eliasson, vice president currency sales at Mizuho Corporate Bank in New York.

Still, the report could provide fodder for both candidates. The unemployment rate rose largely because 578,000 people entered the workforce. That helped push the participation rate, a measure of the portion of the population in the labor force, up two tenths of a point to 63.8 percent.



"Today's increase in the unemployment rate is a sad reminder that the economy is at a virtual standstill," Romney said in a statement. The White House said the report shows an economy that is continuing to heal.

Barring a sharp acceleration in hiring, the report could reinforce the idea that a full recovery from the 2007-09 recession remains distant. The jobless rate, which peaked during the recession at 10 percent, remains about 3 percentage points above its pre-recession level.

The Labor Department said Superstorm Sandy had no effect on the employment and unemployment data for October.

Job gains in October were almost across the board, with the exception of government, where payrolls fell 13,000 after three months of increase. Temporary help jobs, often seen as a harbinger for permanent hiring, rebounded from two straight months of losses.

One shadow on the numbers: The slack in the labor market has weighed heavily on earnings growth. Average hourly earnings for all employees rose only one cent and the workweek was steady.

Over the past 12 months, hourly earnings for all workers are up just 1.6 percent, the lowest on records dating to early 2007. A measure with a longer track record that covers only production and non-supervisory employees was up only 1.1 percent -- the lowest on records dating to 1964

Reuters contributed to this report.