The U.S economy trumped economists’ expectations by creating 126,000 jobs in October. The U.S. Labor Department said the unemployment rate fell a tenth of a percentage point to 6%, its lowest level in six months.

Employers are finally hiring, and they boosted payrolls more than double what economists had expected. Non-farm business payrolls jumped 126,000.

Employers also increased workers’ hours for the first time in three months: the average workweek grew six minutes to 33.8 hours.

Not only did October’s result trump expectations, but previous months were revised up dramatically, too. August’s 41,000-job loss turned into a 35,000 job gain, and September’s 57,000 gain revised up to 125,000.

RBC Financial notes that these revisions double the number of jobs created in the past three months such that all told there are now 270,000 more people working in October than markets were aware of mere hours ago. This adds tremendously to the staying power of the recovery and puts 2004 growth prospects firmly in the 4% range, RBC says.

“This report upgrades from ‘knock-your-socks-off’ to ‘knock-your-pants-off’ in the degree of surprise it poses for the market. Maybe we need a new metaphor?” enthuses BMO Nesbitt Burns. It notes that the increases were led by services, as anticipated. Factory jobs continued to erode, albeit at a slower pace.

“The downtick in the jobless rate was another surprise that inches the market closer to expecting a Fed rate hike next spring, or before,” Nesbitt says.

“The bottom line is that with the job market finally turning around, the last piece of the recovery puzzle is falling into place for the Fed,” RBC concludes.