In the last key economic report before the presidential election, the Labor Department said the economy gained 184,000 private-sector jobs, which was offset by further layoffs of state and local government workers.
The department also revised September's payroll gains upward to 148,000 jobs from the initially reported 114,000, and the August gain to 192,000, up from 142,000.
The largest job gains in October were in professional and business services, healthcare, retail, leisure and hospitality, and construction.
The department said 578,000 more people actively sought employment in October and Alan Krueger, chairman of the White House Council of Economic Advisers, said that was "largely" the reason the unemployment rate rose a 0.1 percent from its September rate of 7.8 percent.
At a campaign rally in Hilliard, Ohio, Friday President Barack Obama told supporters the Labor Department report found U.S. companies "hired more workers in October than at any time in the last eight months."
He said the economy has made "real progress" during his term in office "but we are here today because we know we've got more work to do."
Republican presidential nominee Mitt Romney issued a statement calling the increase in the unemployment rate "a sad reminder that the economy is at a virtual standstill."
"The jobless rate is higher than it was when President Obama took office," Romney said, "and there are still 23 million Americans struggling for work."
U.S. House Speaker John Boehner, R-Ohio, said, "Four years of persistently high unemployment and long-term joblessness might be the best President Obama can do -- but it's nowhere near what the American people can do if we get Washington out of their way."
Paul Dales, senior U.S. economist for Capital Economics, told The New York Times Friday's report indicates things are "better than we'd expected and certainly better than we'd thought a few months ago," but he said the economy is not making sufficient progress to bring the jobless rate down "significantly and rapidly."
The Labor Department said there were 154,000 fewer people listed as "discouraged workers" -- people who have given up looking for work -- than there had been 12 months earlier.
When the Labor Department reported last month the September unemployment rate was down to 7.8 percent -- to its lowest level since Obama took office -- some conservatives accused the Bureau of Labor Statistics of manipulating the figures to help Obama's re-election chances.
October is the 25th straight month in which the U.S. economy has posted net job gains but economists calculate the economy needs to add at least 250,000 jobs a month for several years to bring the jobless rate to less than 6 percent, MarketWatch reported. The last time the rate was at that level was July 2008 when it was 5.8 percent, BLS says.
The recession started in December 2007 and accelerated sharply in September 2008.