Unemployment dropped slightly in October to 5.3 percent, the government said Friday, providing evidence of a continuing economic expansion that has been heralded by George Bush's presidential campaign.

In the last economic report before the election, the Labor Department said unemployment dropped to 5.3 percent in October, compared with 5.4 percent in September. Payroll employment grew by 323,000 jobs, a healthy non-farm payroll figure within the range forecast by analysts.Compared to a year ago, the jobless rate is down seven-tenths of a percent. The October figures meant that 6.5 million Americans were out of work and 115.5 million people had jobs.

In a note of caution, the figures showed that holiday hiring in general merchandise stores was less than expected.

The retail trade sector added 50,000 jobs during the month, with the increases coming in food stores, restaurants and bars. Manufacturing employment rose by 100,000 jobs, offsetting a decline of 45,000 jobs during the previous two months.

The jobless rate was 4.6 percent for whites, 11 percent for blacks and 7.7 percent for Hispanics. Some 30.4 percent of black teenagers were out of work.