The economy created 171,000 jobs in October, while the unemployment rate rose to 7.9%, from 7.8%, according to the Labor Department.

How can this be?

The household survey measure still showed employment increasing by 410,000. However, the labor force increased by an even bigger 578,000.

Non-farm payrolls increased by a better than expected 171,000 last month, consensus forecast 125,000, and the gains in the preceding two months were revised up by a cumulative 84,000.

This morning’s October 2012 jobs report has good news and bad news for housing," said Jed Kolko, economist for Trulia. "Construction employment rose, and employment of 25-34 year-olds – prime age for housing demand -- is picking up. However, job growth lagged in “clobbered metros” – those hardest-hit in the housing bust."

After growing an average of about 50,000 per month in the middle of this year, payrolls have now been steadily increasing by an average of 173,000 over the past four months.

"We doubt that October's Employment Report is either strong enough or weak enough to have any marked impact on next week's presidential election," said Paul Ashworth, chief economist at Capital Economics. "The bottom line is that the labor market remains unusually weak, but whether it is weak enough to prevent Obama getting re-elected is anyone's guess."