US employers speeded up hiring in October and the jobless rate moved higher as more workers restarted job hunts - a hopeful sign for a lacklustre economy.

US employers added 171,000 people to their payrolls last month, the Labor Department said today.

The government also said 84,000 more jobs were created in August and September than initially estimated.

The jobless rate edged a tenth of a point higher to 7.9%, but that was due to a surge of workers back into the workforce. 

Only people who have recently looked for a job can count as unemployed. The employment data was the last major report card on the economy before Tuesday's presidential election.

While the rise in the jobless rate was expected, the increase in payrolls beat even the most optimistic forecasts.

However, even sustained monthly gains of 171,000 would likely bring down the jobless rate only slowly. With the relative strength seen in the report, a full recovery from the 2007-09 recession remains distant.

The jobless rate, which peaked during the recession at 10%, remains about 3 percentage points above its pre-recession level.

The persistently high unemployment rate makes it unlikely the Federal Reserve will lose its resolve to keep easy money policies in place until the economy shows more vigour.

Even with a moderate pace of job creation, the US economy faces a real threat of a renewed recession next year. Without action by lawmakers, existing legislation will raise taxes and cut spending to the tune of about $600 billion in 2013. That scenario - known in Washington as the "fiscal cliff" - could easily cause the economy to contract.

Europe's debt crisis, which has hit factories around the world, including those in the US, is also weighing on the US economic recovery.

In October, however, US manufacturers added 13,000 jobs, snapping two months of decline in a row.

Nonetheless, the Fed is expected to expand a new bond-buying programme at the end of the year to compensate for the end of another stimulus programme aimed at driving down borrowing costs. Persistently weak labour market conditions led the Fed in September to launch a programme to buy $40 billion worth of mortgage-backed securities every month until there is a sustained pick-up in the labor market.