Jobs Strength Puts Fed on Hot Seat

"Stores are hiring, but it's more muted than what we'd expect given the nature of the business being so strong," he said. Ace, which has 4,700 stores that are mostly independently owned, recorded strong sales growth during the past six months, including a 4% gain in October."We definitely saw some softening of the business when the politicians were making all the headlines" during the government shutdown, Mr. Venhuizen said. "And nothing was really resolved,alligator shear just put off. That creates more uncertainty, not less."But the improving stock market and broader gains in the economy appear to be giving wealthier Americans more confidence about opening their wallets.

When the economy went sour, affluent clients "still had plenty of money" but chose to put off renovations, said Kelly Conklin, owner of Foley Waite Associates, a woodworking firm in Kenilworth, N.J., that is seeing increased orders from luxury-home builders and renovators. "Now that the economy seems to be improving, they are getting more comfortable spending their money."Strengthening demand has allowed the firm to add four employees this fall,alligator shear bringing its head count to 14. That is the same size it was before the recession, which forced Foley Waite to cut back to as few as four workers.Overall, 11.3 million Americans remained unemployed in October, a number that has held steady for several months. A broader measure of unemployment that includes discouraged workers and those working part time, but who want full-time employment, rose to 13.8% from 13.6% in September.

Fed Chairman Ben Bernanke, speaking at an International Monetary Fund conference Friday, commented broadly about slack in the labor market. The unemployment rate, he said,skin analyzer probably understates the softness in the labor market. It is an argument Fed officials have made before. Because so many Americans are leaving the labor force, they are also leaving the government's counts of unemployed workers and holding down the jobless rate.The slack is a reason why the Fed has continued pushing easy-money policies. Mr. Bernanke gave no indication Friday of whether he is more or less inclined to start pulling back on the bond-buying program.

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